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Y2K and offshoring : the role of external economies and firm heterogeneity

Author: Devashish Mitra; Priya Ranjan; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, ©2005.
Series: Working paper series (National Bureau of Economic Research), working paper no. 11718.
Edition/Format:   Print book : EnglishView all editions and formats
Summary:
"We construct a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in an industry. Also, the initial advantage of a country as a potential host for outsourcing activities can create a lock in effect, whereby late movers have a comparative  Read more...
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Additional Physical Format: Online version:
Mitra, Devashish.
Y2K and offshoring.
Cambridge, Mass. : National Bureau of Economic Research, ©2005
(OCoLC)647524541
Material Type: Internet resource
Document Type: Book, Internet Resource
All Authors / Contributors: Devashish Mitra; Priya Ranjan; National Bureau of Economic Research.
OCLC Number: 62351405
Notes: "October 2005."
Description: 31, [10] pages : illustrations ; 22 cm.
Series Title: Working paper series (National Bureau of Economic Research), working paper no. 11718.
Responsibility: Devashish Mitra, Priya Ranjan.

Abstract:

"We construct a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in an industry. Also, the initial advantage of a country as a potential host for outsourcing activities can create a lock in effect, whereby late movers have a comparative disadvantage. Furthermore, the existence of firm heterogeneity along with externalities can help explain the dynamic process of offshoring, where the most productive firms offshore first and the others follow later. Finally, we show the possibility of complementarity between two modes of offshoring: FDI and offshore outsourcing"--National Bureau of Economic Research web site.

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