From Local to Global: Offshoring and Asset Prices

58 Pages Posted: 10 Nov 2018 Last revised: 22 Aug 2023

See all articles by Lorenzo Bretscher

Lorenzo Bretscher

Swiss Finance Institute - HEC Lausanne; Centre for Economic Policy Research (CEPR)

Date Written: March 23, 2020


Industries differ in the extent to which they can offshore their production. I document that industries with low offshoring potential carry a sizeable risk premium compared to industries with high offshoring potential, suggesting that the possibility to offshore affects industry risk. A two-country dynamic trade model in which offshoring allows firms to secure market share against foreign competitors is able to rationalize the empirical findings.

Keywords: Asset Prices, Import Competition, Offshoring

JEL Classification: F11, G12

Suggested Citation

Bretscher, Lorenzo, From Local to Global: Offshoring and Asset Prices (March 23, 2020). Available at SSRN: or

Lorenzo Bretscher (Contact Author)

Swiss Finance Institute - HEC Lausanne ( email )

Chavannes-près-Renens, Vaud
1015 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

United Kingdom

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