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dc.contributor.authorBandyopadhyay, Subhayuen_US
dc.contributor.authorMarjit, Sugataen_US
dc.contributor.authorYang, Leien_US
dc.date.accessioned2011-05-30en_US
dc.date.accessioned2011-06-28T13:55:36Z-
dc.date.available2011-06-28T13:55:36Z-
dc.date.issued2011en_US
dc.identifier.piurn:nbn:de:101:1-201104084375en_US
dc.identifier.urihttp://hdl.handle.net/10419/46116-
dc.description.abstractBarriers to outsourcing that are being currently implemented in the US effectively tax its companies who export jobs through outsourcing. The objective is to raise domestic employment. Given that many of the important international markets where the US has a comparative advantage feature non-atomistic firms, we evaluate the implications of such policies in an oligopolistic context. We find that while an outsourcing tax favors domestic workers by causing firms to switch to a greater use of domestic sources (the substitution effect), the loss in international competitiveness has a negative volume effect (the output effect), which pulls in the other direction. First, we identify the conditions that determine the relative strengths of these effects, which inform us about the conditions under which such a tax achieves its stated objective. Next, we consider the international policy interdependence that arises when a competing nation also engages in such a policy. An interesting finding is that even if a unilateral tax by the US raises its employment, this may turn around in a Nash policy equilibrium, where the competing nation abandons free trade and also engages in unilateral outsourcing policies. Finally, we extend the basic model to look at the effects of credit shortage and product differentiation. Interesting findings are that both a credit crisis (as in recent years) and increased product differentiation tend to worsen the employment effects of the outsourcing tax. The qualitative nature of our findings is similar between Cournot and Bertrand competition, suggesting that our results are robust to the mode of strategic behavior.en_US
dc.language.isoengen_US
dc.publisherIZA Bonnen_US
dc.relation.ispartofseriesDiscussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5426en_US
dc.subject.jelF13en_US
dc.subject.ddc330en_US
dc.subject.keywordoutsourcing taxen_US
dc.subject.keywordemployment effectsen_US
dc.subject.keywordoligopolistic competitionen_US
dc.subject.keywordproduct differentiationen_US
dc.subject.stwOutsourcingen_US
dc.subject.stwOffshoringen_US
dc.subject.stwSteueren_US
dc.subject.stwSteuerwirkungen_US
dc.subject.stwBeschäftigungseffekten_US
dc.subject.stwOligopolen_US
dc.subject.stwInternationaler Wettbewerben_US
dc.subject.stwProduktdifferenzierungen_US
dc.subject.stwTheorieen_US
dc.subject.stwUSAen_US
dc.titleAn evaluation of the employment effects of barriers to outsourcingen_US
dc.typeWorking Paperen_US
dc.identifier.ppn660910942en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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