Offshoring as Process Innovation
نویسنده
چکیده
This paper studies offshoring (defined as a change in firms’ own production location from north to south) and market structure. I develop a model of dynamic oligopoly with offshoring, and estimate it using data from the hard disk industry. The results suggest the incentive to offshore increases as more rivals offshore due to competitive pressure. The possibility of offshoring sets in motion the strategic industry dynamics in which firms become increasingly more likely to offshore or exit, thereby playing the role of a “drastic” innovation (Arrow 1962) in the long run. I then assess the effects of banning offshoring and industrial policy (in the future version).
منابع مشابه
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