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A new impetus for endogenous growth: R&D offshoring via virtual labor mobility

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  • Noritsugu Nakanishi
  • Ngo Van Long
Abstract
We develop a simple North–South model of quality ladders to show that the virtual mobility of labor across time zones, facilitated by the advance in communication technology, can raise the endogenous growth rate of the world economy. The unique balanced growth rate is increasing in the endowments of skilled labor in both countries and decreasing in the rate of impatience. Moreover, we find that partial R&D offshoring to the South has initially a negative effect on the level of skilled wages in the North, but this is compensated for by its positive effect on the growth rate in both North and South.

Suggested Citation

  • Noritsugu Nakanishi & Ngo Van Long, 2020. "A new impetus for endogenous growth: R&D offshoring via virtual labor mobility," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 846-883, August.
    • Handle: RePEc:bla:reviec:v:28:y:2020:i:3:p:846-883
    DOI: 10.1111/roie.12473
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    Cited by:

    1. Mandal, Biswajit, 2024. "Digital Mobility of Financial Capital Across Different Time Zones, Factor Prices and Sectoral Composition," MPRA Paper 119764, University Library of Munich, Germany.
    2. Sugata Marjit, 2020. "A new Ricardian model of trade, growth and inequality- The role of financial capital," Discussion Papers 2020-28, University of Nottingham, GEP.
    3. Sugata Marjit & Reza Oladi, 2021. "Vertical Specialization, International Task Fragmentation, and Convergence," CESifo Working Paper Series 9406, CESifo.
    4. Sugata Marjit, 2020. "A New Ricardian Model of Trade, Growth and Inequality," CESifo Working Paper Series 8689, CESifo.
    5. Marjit, Sugata & Yang, Lei, 2020. "An Elementary Theorem on Gains from Virtual Trade," MPRA Paper 104088, University Library of Munich, Germany.
    6. Sugata Marjit & Lei Yang, 2020. "An Elementary Theorem on Gains from Virtual Trade," Working Papers 2046, Indian Institute of Foreign Trade.

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    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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