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Offshoring in a ricardian world
- NBER Working Papers 13203
, 2009
"... This paper proposes a Ricardian model to understand the short-run and long-run aggregate effects of increased fragmentation and offshoring on rich and poor countries. The short-run analysis shows that, when offshoring is sufficiently high, further increases in offshoring benefit the poor country and ..."
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Cited by 16 (4 self)
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This paper proposes a Ricardian model to understand the short-run and long-run aggregate effects of increased fragmentation and offshoring on rich and poor countries. The short-run analysis shows that, when offshoring is sufficiently high, further increases in offshoring benefit the poor country and hurt the rich country. But these effects may be reversed in the long run as countries adjust their research efforts in response to increased offshoring. In particular, in the long run, the rich country always gains from increased offshoring, whereas poor countries see their static gains partially eroded by a decline in their research efforts. (JEL F12, F23, L24, M16) Technological change has led to a dramatic decline in the cost of communication and in the cost of coordinating activities performed in different locations. This has allowed firms in rich countries to fragment their production process and offshore an increasing share of the value chain to low-wage countries. 1, 2 Richard Baldwin (2006) refers to this phenomenon as the “second unbundling. ” In his words,
Trade-in-Goods and Trade-in-Tasks: An Integrating Framework. Working Paper No.15882
, 2010
"... Our paper integrates results from trade-in-task theory into mainstream trade theory by developing trade-in-task analogues to the four famous theorems (Heckscher-Ohlin, factor price equalisation, Stolper-Samuelson, and Rybczynski) and showing the standard gains-from-trade theorem does not hold for tr ..."
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Cited by 15 (3 self)
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Our paper integrates results from trade-in-task theory into mainstream trade theory by developing trade-in-task analogues to the four famous theorems (Heckscher-Ohlin, factor price equalisation, Stolper-Samuelson, and Rybczynski) and showing the standard gains-from-trade theorem does not hold for trade-in-tasks. We show trade-in-tasks creates intraindustry trade in a Walrasian economy, and derive necessary and sufficient conditions for analyzing the impact of trade-in-tasks on wages and production. Extensions of the integrating framework easily accommodate
Vertical specialization across the world: A relative measure
- in North American Journal of Economics and Finance
"... The analyses, opinions and findings of these papers represent the views of the authors, they are not necessarily those of the Banco de Portugal. Please address correspondence to ..."
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Cited by 14 (1 self)
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The analyses, opinions and findings of these papers represent the views of the authors, they are not necessarily those of the Banco de Portugal. Please address correspondence to
Modes of delivery in services
- CEPR Discussion Paper
, 2010
"... By definition, services are a flow and not a stock. As a consequence, direct proximity and interaction between supplier and consumer is more important than is the case with goods, meaning FDI also plays a differ-ent mix of roles than in manufacturing sectors. In this paper we focus on the relative i ..."
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Cited by 4 (2 self)
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By definition, services are a flow and not a stock. As a consequence, direct proximity and interaction between supplier and consumer is more important than is the case with goods, meaning FDI also plays a differ-ent mix of roles than in manufacturing sectors. In this paper we focus on the relative importance of direct cross-border trade and indirect sales through local establishments, developing and exploiting a data set that merges information from a number of sources on sector level U.S. inward and outward sales. Our results provide insight into sector-level variation in modes of entry (sales through foreign affiliate and cross-border sales), in-cluding the impact of standard measures of economic distance and relative stocks of human capital. We examine the determinants of entry modes and contrast services with manufacturing sectors to assess whether motives for affiliate activity are based on the same determinants. In contrasts with FDI in manufacturing, overseas multinational activity in services increases relative to direct exports the further away are host countries, the lower are investment barriers and the higher is manufacturing FDI. The impact of factors like language, market size and relative stocks of human capital on modes of service delivery varies across sectors, indicating the heterogeneous nature of services across sectors. For manufacturing sectors, the impact of the determinants of modes of entry significantly differ from our results found in service sectors. The evidence on interdependence across modes and the importance of local affiliates implies that the impact of policy in any one mode is likely to depend on the mix of domestic regulation and policy across modes.
Modern Services Exports from Emerging Countries— Perspectives and Opportunities
"... Traditionally, developed countries are the major exporters of services; however, technological developments in IT and communications over the last two decades have made it possible for developing countries to exploit their comparative advantage in some modern services. The driving force for this com ..."
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Traditionally, developed countries are the major exporters of services; however, technological developments in IT and communications over the last two decades have made it possible for developing countries to exploit their comparative advantage in some modern services. The driving force for this comparative advantage is the large pool of
To be published in the Journal of Urban Economics
, 2007
"... Offshoring of routine tasks and (de)industrialisation: Threat or opportunity—And for whom? ..."
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Offshoring of routine tasks and (de)industrialisation: Threat or opportunity—And for whom?
B. Global Services Models............................................................................................................................. 10
, 2010
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unknown title
, 2010
"... Fragmentation and immiserising specialisation: the case of the textile and clothing sector Céline GIMET a, Bernard GUILHON b, Nathalie ROUX c halshs-00464393, version 1- 17 Mar 2010 Abstract: With production activity tending rapidly towards international fragmentation, this study examines the conseq ..."
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Fragmentation and immiserising specialisation: the case of the textile and clothing sector Céline GIMET a, Bernard GUILHON b, Nathalie ROUX c halshs-00464393, version 1- 17 Mar 2010 Abstract: With production activity tending rapidly towards international fragmentation, this study examines the consequences for labour countries of the forms of specialisation brought about by fragmentation processes. It further addresses the risk that fragmented sectors may become excluded from greater developments within the manufacturing industry as a whole. An empirical analysis using panel data reveals that, contrary to expectation, the textile and clothing sector in labour countries does not always reap the positive benefits of this form of international trade integration. Rather, we observe a phenomenon of immiserising specialisation, due to a drop in relative wages within this sector.
rapidly than domestic output. These imports increasingly originate in the developing
, 2011
"... Abstract Economists and other social scientists are calling for a reassessment of the impact of international trade on labor markets in developed and developing countries. Classical models of globalization and trade, based upon the international exchange of finished goods, fail to capture the fragme ..."
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Abstract Economists and other social scientists are calling for a reassessment of the impact of international trade on labor markets in developed and developing countries. Classical models of globalization and trade, based upon the international exchange of finished goods, fail to capture the fragmentation of much commodity production and the geographical separation of individual production tasks. This fragmentation, cap-tured in the growing volume of intra-industry trade, prompts investigation of the effects of trade within, rather than between, sectors of the economy. In this paper we examine the relationship between international trade and the task structure of US employment. We link disaggregate US trade data from 1972 to 2006, the NBER manufacturing database, the Decennial Census, and occupational and task data from the Dictionary of Occupational Titles. Within-industry shifts in task characteristics are linked to import competition and technological change. Our results suggest that trade has played a major role in the growth in relative demand for nonroutine tasks, par-
Internationalized Production and Monetary Policy Coordination
"... We investigate the welfare gains of international monetary coordina-tion in the presence of internationalized production- firms employ both domestic and foreign produced intermediate goods. Incorpo-rating internationalized production into a two-country intertemporal general equilibrium model, we stu ..."
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We investigate the welfare gains of international monetary coordina-tion in the presence of internationalized production- firms employ both domestic and foreign produced intermediate goods. Incorpo-rating internationalized production into a two-country intertemporal general equilibrium model, we study the role for a delegated mone-tary authority in implementing the competitive allocation. We find that the range of parameter values that supports delegated policy co-ordination as well as the sizes of welfare gains from policy coordi-nation shrink when the extent of internationalized production rises. Thus, international trade in intermediate goods diminishes the via-bility of an international monetary authority.
