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Journal of Economic Integration 2002 April;17(4) :689-709.
DOI: https://doi.org/10.11130/jei.2002.17.4.689
International Outsourcing in a Two-Sector Heckscher-Ohlin Model

Hartmut Egger 

University of Zurich
Copyright ©2002 Journal of Economic Integration
ABSTRACT
This paper analyzes the distributional effects of international outsourcing in a two sector Heckscher-Ohlin type model if both sectors get economical access to cost-saving international outsourcing. Thereby, it is shown that if both sectors are engaged in international outsourcing in equilibrium, the cost-saving effects of outsourcing as well as the factor contents of the outsourced fragments are relevant for the factor price effects. Concerning the Pareto-criterion the main finding is that a Pareto-improving factor price impact of international outsourcing cannot be excluded from a theoretical point of view. JEL Classifications (F14, F15, F16, F40)
Keywords: International Outsourcing | General Equilibrium Analysis | Distributional Effects | Welfare Effects
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