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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Outsourcing and trade in a spatial world |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of Urban Economics |
| Publisher | Elsevier |
| Geographical Reach | international |
| ISSN | 0094-1190 |
| Volume | 62 |
| Number | 3 |
| Page Range | 441 - 470 |
| Date | 2007 |
| Abstract Text | This paper provides an analysis of outsourcing and trade in a spatial model à la Hotelling. In this setting, we discuss the trade-off between transport-cost-related disadvantages and outsourcing-related production cost advantages of a large economy and we investigate how the existence of national transport costs influences both the structure of industrial production and the pattern of final goods trade. In addition, the model gives a rich picture of the possible welfare effects of trade liberalization. In particular, we show that a final goods exporting country definitely gains from economic integration, while a final goods importing country may lose. Finally, when lowering domestic outsourcing activities, trade liberalization may reduce world welfare, even if pro-competitive effects lead to a decline in consumer prices. |
| Digital Object Identifier | 10.1016/j.jue.2006.12.005 |
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