Offshoring and Directed Technical Change

Daron Acemoglu, Gino Gancia and Fabrizio Zilibotti

American Economic Journal: Macroeconomics, 2015, vol. 7, issue 3, 84-122

Abstract: We study the implications of offshoring on innovation, technology, and wage inequality in a Ricardian model with directed technical change. Profit maximization determines both the extent of offshoring and the direction of technological progress. A fall in the offshoring cost induces technical change with an ambiguous factor bias. When the initial cost of offshoring is high, an increase in offshoring opportunities causes a fall in the real wages of unskilled workers in industrial countries, skill-biased technical change and rising skill premia. When the offshoring cost is sufficiently low, instead, offshoring induces technical change biased in favor of the unskilled workers. (JEL J24, J31, L24, O33)

JEL-codes: J24 J31 L24 O33 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/mac.20130302
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Citations: View citations in EconPapers (69)

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Related works:
Working Paper: Offshoring and Directed Technical Change (2015)
Working Paper: Offshoring and directed technical change (2014)
Working Paper: Offshoring and Directed Technical Change (2012)
Working Paper: Offshoring and Directed Technical Change (2012)
Working Paper: Offshoring and Directed Technical Change (2012)
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