TY - JOUR
T1 - Outsourcing in a global economy
AU - Grossman, Gene
AU - Helpman, Elhanan
N1 - Funding Information:
Acknowledgements. We thank Patrick Bolton, Oliver Hart, Wolfgang Pesendorfer, Ariel Rubinstein, Fabrizio Zilibotti and three anonymous referees for helpful comments and suggestions and Yossi Hadar and Taeyoon Sung for developing our simulation programs. We are also grateful to the National Science Foundation and the US–Israel Binational Science Foundation for financial support.
PY - 2005/1
Y1 - 2005/1
N2 - We study the determinants of the location of subcontracted activity in a general equilibrium model of outsourcing and trade. We model outsourcing as an activity that requires search for a partner and relationship-specific investments that are governed by incomplete contracts. The extent of international outsourcing depends inter alia on the thickness of the domestic and foreign market for input suppliers, the relative cost of searching in each market, the relative cost of customizing inputs and the nature of the contracting environment in each country.
AB - We study the determinants of the location of subcontracted activity in a general equilibrium model of outsourcing and trade. We model outsourcing as an activity that requires search for a partner and relationship-specific investments that are governed by incomplete contracts. The extent of international outsourcing depends inter alia on the thickness of the domestic and foreign market for input suppliers, the relative cost of searching in each market, the relative cost of customizing inputs and the nature of the contracting environment in each country.
UR - http://www.scopus.com/inward/record.url?scp=13244298201&partnerID=8YFLogxK
U2 - 10.1111/0034-6527.00327
DO - 10.1111/0034-6527.00327
M3 - ???researchoutput.researchoutputtypes.contributiontojournal.article???
AN - SCOPUS:13244298201
SN - 0034-6527
VL - 72
SP - 135
EP - 159
JO - Review of Economic Studies
JF - Review of Economic Studies
IS - 1
ER -