Offshoring along the production chain

Philipp Harms, Oliver Lorz and Dieter Urban

Canadian Journal of Economics, 2012, vol. 45, issue 1, 93-106

Abstract: In this paper, we analyze the offshoring decision of firms whose production process is characterized by a particular sequence of steps. International cost differences vary non-monotonically along the production chain, and moving unfinished goods across borders incurs transport costs. We show that, in such a setting, firms may refrain from offshoring even if relocating individual steps would be advantageous in terms of offshoring costs, or they may offshore (almost) the entire production chain to save transport costs. Small variations in model parameters may thus have a substantial impact on offshoring activities.

JEL-codes: D24 F10 F23 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (34)

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Journal Article: Offshoring along the production chain (2012)
Working Paper: Offshoring along the Production Chain (2009)
Working Paper: Offshoring Along the Production Chain (2009)
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