Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128694
Authors: 
Kratena, Kurt
Wüger, Michael
Year of Publication: 
2001
Series/Report no.: 
WIFO Working Papers 144
Abstract: 
This paper attempts to quantify the impact of fragmentation on employment. Factor demand functions for labour and intermediates and mark up price equations derived from a Generalized Leontief cost function at industry level are estimated. Import prices and output prices influence the price of intermediates via a technology matrix from input - output tables. A decrease in import prices (real trade costs) has a twofold impact on labour demand: (i) substitution of domestic employment by partly imported intermediates (= outsourcing or fragmentation) (ii) increased employment due to higher demand caused by an increase in price competitiveness.
Subjects: 
fragmentation
outsourcing
real trade costs
Generalized Leontief cost functions
JEL: 
F11
F15
D20
Document Type: 
Working Paper

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