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Title:The asymmetric effects of tariffs on intra-firm trade and offshoring decisions PDF Logo
Authors:Díez, Federico J.
Issue Date:2010
Series/Report no.:Working paper series // Federal Reserve Bank of Boston 10-4
Abstract:This paper studies the effects of tariffs on intra-firm trade. Building on the Antràs and Helpman (2004) North-South theoretical framework, I show that higher Northern tariffs reduce the incentives for outsourcing and offshoring, while higher Southern tariffs have the opposite effects. I also show that increased offshoring and outsourcing imply an increase in the ratio of Northern intra-firm imports to total imports, which is an empirically testable prediction. Using a highly disaggregated dataset of U.S. (the North) imports and relevant tariffs, I find robust evidence to support the model´s predictions.
Subjects:Intra-firm trade
offshoring
outsourcing tariffs
JEL:F10
F23
L22
L23
Document Type:Working Paper
Appears in Collections:Working Paper Series, Federal Reserve Bank of Boston

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