Offshoring under Oligopoly

Mitsuru Igami
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Mitsuru Igami: Yale University

No 713, 2015 Meeting Papers from Society for Economic Dynamics

Abstract: This paper uncovers a novel pattern of offshoring and market structure in a high-tech industry, and proposes a simple oligopoly model to explain it. Specifically, the hard disk drive industry (1976-98) witnessed massive waves of entry, exit, and the relocation of manufacturing plants to low-cost countries, in which shakeouts occurred predominantly among home firms and almost all survivors were offshore firms. I build and estimate a dynamic offshoring game with entry/exit to explain these facts, and then investigate the relationship between offshoring and market structure as well as the impacts of hypothetical government interventions.

Date: 2015
New Economics Papers: this item is included in nep-bec, nep-com and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed015:713

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