Extensive Margins of Offshoring and Exporting

Anders Rosenstand Laugesen ()
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Anders Rosenstand Laugesen: Department of Economics and Business Economics, Aarhus University, Denmark, Postal: 8210 Aarhus V, Denmark

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: This paper derives new comparative statics within a two-country version of the recent offshoring model by Antràs, Fort, and Tintelnot (2014) with nonprohibitive costs of exporting final goods. One key finding is that an asymmetric trade liberalisation might very well imply that the fractions of offshorers and exporters increase in one country and decrease in the other country. This model outcome occurs when competition enhances in a country experiencing a decline in its costs of international trade. The fractions of offshorers and exporters certainly increase in a small open economy experiencing a decline in its costs of international trade. These strong industry-level results appear even though the comparative statics at the firm level are nonmonotone and asymmetric across the heterogeneous firms.

Keywords: Firm Heterogeneity; Offshoring; Exporting; Trade Liberalisation (search for similar items in EconPapers)
JEL-codes: D21 F12 F61 L23 (search for similar items in EconPapers)
Pages: 17
Date: 2015-12-16
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