Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18712
Authors: 
Egger, Hartmut
Egger, Peter
Year of Publication: 
2004
Series/Report no.: 
CESifo working papers 1349
Abstract: 
This paper provides an analysis of outsourcing and trade in a spatial model – la Hotelling. In this setting, we discuss the trade-off between transport-cost-related disadvantages and outsourcing-induced production cost advantages of a large economy. The model gives a rich picture of possible trade and welfare effects of a movement towards free trade and points to the role of national transport costs for explaining these effects. Moreover, it gives economic insights in the countries? incentives to lower tariffs and to participate in free trade agreements with partner countries that differ in size and economic capacity.
Subjects: 
international outsourcing
international trade
spatial competition
JEL: 
L13
F15
F12
Document Type: 
Working Paper

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