EconPapers    
Economics at your fingertips  
 

Offshoring in a Knowledge Economy

Pol Antras, Luis Garicano () and Esteban Rossi-Hansberg ()

The Quarterly Journal of Economics, 2006, vol. 121, issue 1, 31-77

Abstract: How does the formation of cross-country teams affect the organization of work and the structure of wages? To study this question, we propose a theory of the assignment of heterogeneous agents into hierarchical teams, where less skilled agents specialize in production and more skilled agents specialize in problem solving. We first analyze the properties of the competitive equilibrium of the model in a closed economy, and show that the model has a unique and efficient solution. We then study the equilibrium of a two-country model (North and South), where countries differ in their distributions of ability, and in which agents in different countries can join together in teams. We refer to this type of integration as globalization. Globalization leads to better matches for all southern workers but only for the best northern workers. As a result, we show that globalization increases wage inequality among nonmanagers in the South, but not necessarily in the North. We also study how globalization affects the size distribution of firms and the patterns of consumption and trade in the global economy.

Date: 2006
References: Add references at CitEc
Citations View citations in EconPapers (184) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1093/qje/121.1.31 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Offshoring in a Knowledge Economy (2006) Downloads
Working Paper: Offshoring in a Knowledge Economy (2005) Downloads
Working Paper: Offshoring in a Knowledge Economy (2005) Downloads
Working Paper: Offshoring in a Knowledge Economy (2005) Downloads
Working Paper: Offshoring in a Knowledge Economy (2005) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:qjecon:v:121:y:2006:i:1:p:31-77.

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Elhanan Helpman, Lawrence F. Katz and Andrei Schleifer

More articles in The Quarterly Journal of Economics from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2018-12-14
Handle: RePEc:oup:qjecon:v:121:y:2006:i:1:p:31-77.