Offshoring, Globalization and Welfare
Offshoring, Globalization and Welfare
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DOI:
10.2139/ssrn.2056214
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发表时间:
2012-05
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影响因子:
--
通讯作者:
Yiming Zhou;Dao‐Zhi Zeng
中科院分区:
文献类型:
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作者:
Yiming Zhou;Dao‐Zhi Zeng
We investigate the issue of offshoring in a general-equilibrium model of two countries and one sector of increasing returns to scale. Our model uncovers that offshoring occurs and endogenously evolves in a bell-shaped pattern when trade costs decline, explaining some stylized facts in developed countries. Furthermore, this simple framework can be applied to examine the welfare issue. We find that a fall in offshoring costs benefits the high-wage country but hurts the low-wage country. On the other hand, the low-wage country benefits with trade liberalization. The impact of falling trade costs on the welfare of the high-wage country depends on the values of offshoring freeness.