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Title:A simple model of service offshoring with time zone differences PDF Logo
Authors:Kikuchi, Toru
Long, Ngo Van
Issue Date:2010
Series/Report no.:CESifo working paper Trade Policy 2990
Abstract:We propose a two-country monopolistic competition model of business service offshoring that captures the advantage conferred by time zone differences. We emphasize the role of the entrepreneurs, who decide how to produce business services (i.e., domestic service provision or service offshoring). It is shown that the utilization of communication networks induces a dramatic change in industrial structure due to entrepreneurial relocation (i.e., service offshoring) to take advantage of time zone differences. We also show that in the presence of moving costs for entrepreneurs, technological improvements and the resulting increase in service offshoring may reduce a country's welfare.
Subjects:service offshoring
time zone differences
technological change
entrepreneurs
communication networks
JEL:F12
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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