Industry Dynamics of Offshoring: The Case of Hard Disk Drives
- (pp. 67-101)
(Complimentary)
Abstract
This paper uncovers a novel pattern of offshoring dynamics in a high-tech industry, and proposes a structural model to explain it. Specifically, the hard disk drive industry (1976-1998) witnessed massive waves of entry, exit, and the relocation of manufacturing plants to low-cost countries, in which shakeouts occurred predominantly among home firms and almost all survivors were offshore firms. I build and estimate a dynamic offshoring game with entry/exit to measure the benefits and costs of offshoring, investigate the relationship between offshoring and market structure, and assess the impacts of hypothetical government interventions.Citation
2018. "Industry Dynamics of Offshoring: The Case of Hard Disk Drives." American Economic Journal: Microeconomics, 10 (1): 67-101. DOI: 10.1257/mic.20150256Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- F14 Empirical Studies of Trade
- L13 Oligopoly and Other Imperfect Markets
- L24 Contracting Out; Joint Ventures; Technology Licensing
- L63 Microelectronics; Computers; Communications Equipment
- O14 Industrialization; Manufacturing and Service Industries; Choice of Technology
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