TY  - JOUR
AU  - Baldwin,Richard
AU  - Robert-Nicoud,Frederic
TI  - Offshoring: General Equilibrium Effects on Wages, Production and Trade
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12991
PY  - 2007
Y2  - March 2007
UR  - http://www.nber.org/papers/w12991
L1  - http://www.nber.org/papers/w12991.pdf
N1  - Author contact info:
Richard Baldwin
Cigale 2
Lausanne Switzerland 1010
Tel: 41-22-908-5900
E-Mail: baldwin@graduateinstitute.ch

frederic robert-nicoud
LSE
Department of Geography and Environment
London WC2A 2AE
United Kingdom
E-Mail: f.l.robert-nicoud@lse.ac.uk
AB  - A simple model of offshoring, which depicts offshoring as 'shadow migration,' permits straightforward derivation of necessary and sufficient conditions for the effects on wages, prices, production and trade. We show that offshoring requires modification of the four classic international trade theorems, so econometricians who ignore offshoring might reject the Heckscher-Ohlin theorem when a properly specified version held in the data. We also show that offshoring is an independent source of comparative advantage and can lead to intra-industry trade in a Walrasian setting. The model is extended to allow for two-way offshoring between similar nations, and to allow for monopolistic competition.
ER  -