Offshoring and Sequential Production Chains: A General Equilibrium Analysis

Philipp Harms, Jaewon Jung () and Oliver Lorz
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Jaewon Jung: RWTH Aachen Universtiy

No 1607, Working Papers from Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz

Abstract: We present a two-region general equilibrium model in which ?rms exploit international wage differences by offshoring parts of the production process. Firms have to take into account that production steps follow a strict sequence and that transporting intermediate goods across borders is costly. We analyze how a change in transport costs and various properties of the production process affect the volume of offshoring, accounting for the general equilibrium effects of ?rms’ decisions. Interestingly, the in?uence of declining transport costs on the range of tasks offshored per ?rm may differ from the effect on the number of ?rms engaged in offshoring.

Keywords: Offshoring; sequential production; global production chain; task trade. (search for similar items in EconPapers)
JEL-codes: D24 F10 F23 L23 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2016-02
New Economics Papers: this item is included in nep-int
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https://download.uni-mainz.de/RePEc/pdf/Discussion_Paper_1607.pdf First version, 2016 (application/pdf)

Related works:
Journal Article: Offshoring and sequential production chains: A general equilibrium analysis (2021)
Working Paper: Offshoring and Sequential Production Chains: A General Equilibrium Analysis (2017)
Working Paper: Offshoring and Sequential Production Chains: A General-Equilibrium Analysis (2014)
Working Paper: Offshoring and Sequential Production Chains: A General-Equilibrium Analysis (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:jgu:wpaper:1607

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