EconPapers    
Economics at your fingertips  
 

Trade Liberalization and Strategic Outsourcing

Yongmin Chen (), Jota Ishikawa and Zhihao Yu ()

No 2001-04, Discussion Papers from Graduate School of Economics, Hitotsubashi University

Abstract: This paper develops a theory of strategic outsourcing that arises due to trade liberalization. With trade liberalization, a domestic firm may choose to purchase the intermediate good from a more efficient foreign producer, who also competes with the domestic firm in the final-good market. This can result in higher prices for both the intermediate and final goods. Although trade liberalization in the final product would lower the price of the final good, it could cause the price of the intermediate product to either increase or decrease, depending on the characteristics of the final products. Therefore, in the presence of strategic outsourcing, trade liberation can have ambiguous effects on consumer prices, depending on the relative tariff reductions for intermediate and final goods.

Pages: 19, [2] p.
Date: 2001-05
Note: May 8, 2001
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/17029/1/070econDP01-04.pdf

Related works:
Journal Article: Trade liberalization and strategic outsourcing (2004) Downloads
Working Paper: Trade Liberalization and Strategic Outsourcing (2004) 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:hit:econdp:2001-04

Access Statistics for this paper

More papers in Discussion Papers from Graduate School of Economics, Hitotsubashi University Contact information at EDIRC.
Bibliographic data for series maintained by Digital Resources Section, Hitotsubashi University Library ().

 
Page updated 2020-02-18
Handle: RePEc:hit:econdp:2001-04