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Bailing outsourcing

Travis Ng ()

Journal of Comparative Economics, 2014, vol. 42, issue 4, 983-993

Abstract: In a model of organizational choice, this paper shows that in face of an increasingly expected bailout from the government, outsourcing input production to an offshore location is more likely an optimal choice for a firm. Such a response is consistent with the three trends in the US manufacturing sector after the crisis: (a) employment keeps declining; (b) massive layoffs have not stopped; and (c) imported intermediate inputs have been gaining importance.

Keywords: Offshoring; Outsourcing; Bailouts (search for similar items in EconPapers)
JEL-codes: D40 L15 L51 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1016/j.jce.2014.01.002

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