Trading Tasks: A Simple Theory of Offshoring
Gene M. Grossman and Esteban Rossi-Hansberg
|
| Article Citation |
Grossman, Gene M., and Esteban Rossi-Hansberg. 2008. "Trading Tasks: A Simple Theory of Offshoring." American Economic Review, 98(5): 1978–97.
DOI:10.1257/aer.98.5.1978
|
| Abstract |
We propose a theory of the global production process that focuses on tradeable
tasks, and use it to study how falling costs of offshoring affect factor prices in
the source country. We identify a productivity effect of task trade that benefits
the factor whose tasks are more easily moved offshore. In the light of this effect,
reductions in the cost of trading tasks can generate shared gains for all domestic
factors, in contrast to the distributional conflict that typically results from
reductions in the cost of trading goods. (JEL F11, F16)
|
| Article Full-Text Access |
|
| Authors |
Grossman, Gene M. (Princeton U)
Rossi-Hansberg, Esteban (Princeton U)
|
| JEL Classifications |
F11: Neoclassical Models of Trade
L23: Organization of Production
L24: Contracting Out; Joint Ventures; Technology Licensing
M11: Production Management
|
|
|
|
