Header

UZH-Logo

Maintenance Infos

Outsourcing and trade in a spatial world


Egger, H; Egger, P (2007). Outsourcing and trade in a spatial world. Journal of Urban Economics, 62(3):441-470.

Abstract

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.

Abstract

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.

Statistics

Citations

12 citations in Web of Science®
12 citations in Scopus®
Google Scholar™

Altmetrics

Downloads

491 downloads since deposited on 06 May 2008
12 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:November 2007
Deposited On:06 May 2008 10:33
Last Modified:21 Nov 2017 13:26
Publisher:Elsevier
ISSN:0094-1190
Publisher DOI:https://doi.org/10.1016/j.jue.2006.12.005

Download

Download PDF  'Outsourcing and trade in a spatial world'.
Preview
Content: Accepted Version
Filetype: PDF
Size: 445kB
View at publisher