Download this Paper Open PDF in Browser

Industry Dynamics of Offshoring: The Case of Hard Disk Drives

American Economic Journal: Microeconomics, (February 2018) Forthcoming

79 Pages Posted: 18 Dec 2010 Last revised: 5 Sep 2017

Mitsuru Igami

Yale University - Department of Economics ; Yale University - Cowles Foundation

Date Written: January 26, 2017

Abstract

This paper uncovers a novel pattern of offshoring dynamics in a high-tech industry, and proposes a structural model to explain it. Specifically, the hard disk drive industry (1976-98) witnessed massive waves of entry, exit, and the relocation of manufacturing plants to low-cost countries, in which shakeouts occurred predominantly among home firms and almost all survivors were offshore firms. I build and estimate a dynamic offshoring game with entry/exit to measure the benefits and costs of offshoring, investigate the relationship between offshoring and market structure, and assess the impacts of hypothetical government interventions.

Keywords: Dynamic Oligopoly, Industry Life Cycle, Offshoring, Strategic Trade Policy

JEL Classification: F12, F13, F14, F21, F23, L13, L52, L63

Suggested Citation

Igami, Mitsuru, Industry Dynamics of Offshoring: The Case of Hard Disk Drives (January 26, 2017). American Economic Journal: Microeconomics, (February 2018) Forthcoming. Available at SSRN: https://ssrn.com/abstract=1726910 or http://dx.doi.org/10.2139/ssrn.1726910

Mitsuru Igami (Contact Author)

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Paper statistics

Downloads
142
Rank
173,792
Abstract Views
821