Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/46116 
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dc.contributor.authorBandyopadhyay, Subhayuen
dc.contributor.authorMarjit, Sugataen
dc.contributor.authorYang, Leien
dc.date.accessioned2011-05-30-
dc.date.accessioned2011-06-28T13:55:36Z-
dc.date.available2011-06-28T13:55:36Z-
dc.date.issued2011-
dc.identifier.piurn:nbn:de:101:1-201104084375en
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
dc.language.isoengen
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen
dc.relation.ispartofseries|aIZA Discussion Papers |x5426en
dc.subject.jelF13en
dc.subject.ddc330en
dc.subject.keywordoutsourcing taxen
dc.subject.keywordemployment effectsen
dc.subject.keywordoligopolistic competitionen
dc.subject.keywordproduct differentiationen
dc.subject.stwOutsourcingen
dc.subject.stwOffshoringen
dc.subject.stwSteueren
dc.subject.stwSteuerwirkungen
dc.subject.stwBeschäftigungseffekten
dc.subject.stwOligopolen
dc.subject.stwInternationaler Wettbewerben
dc.subject.stwProduktdifferenzierungen
dc.subject.stwTheorieen
dc.subject.stwUSAen
dc.titleAn evaluation of the employment effects of barriers to outsourcing-
dc.typeWorking Paperen
dc.identifier.ppn660910942en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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