Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/38727
Authors: 
Horgos, Daniel
Year of Publication: 
2009
Series/Report no.: 
Diskussionspapier // Helmut-Schmidt-Universität, Universität der Bundeswehr Hamburg, Fächergruppe Volkswirtschaftslehre 88
Abstract: 
Considering the sector bias of International Outsourcing within a 2x2 framework, four different scenarios appear. Each industry can either relocate its high or its low skill intensive production fragment. Traditionally, depending on the superiority of a wage vs. an outsourcing-effect, general equilibrium effects of two scenarios are assumed to be ambiguous. Applying a formal duality approach and a calibration exercise for the German economy, this contribution shows that a focus on the elasticity of substitution can solve the puzzle. With the elasticity exceeding a critical value, unambiguous results in all four scenarios appear, supporting the sector bias of International Outsourcing.
Subjects: 
International Outsourcing
Sector Bias
Elasticity of Substitution
JEL: 
F16
F41
E25
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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