We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Exporting and Offshoring with Monopsonistic Competition.
- Authors
Egger, Hartmut; Kreickemeier, Udo; Moser, Christoph; Wrona, Jens
- Abstract
We develop a model of international trade with heterogeneous firms and monopsonistically competitive labour markets. We show that due to monopsonistic competition our model makes sharply different predictions about the effects of the export of goods and the offshoring of tasks. Trade in goods is unambiguously welfare increasing as domestic resources are reallocated to large firms with high productivity and firms with low productivities exit the market thereby reducing the monopsony distortion present in autarky. Offshoring, however, gives firms additional scope for exercising monopsony power by reducing their domestic size and therefore can lead to welfare losses.
- Subjects
OFFSHORE outsourcing; MARKET exit; LABOR market; INTERNATIONAL trade; AUTARCHY
- Publication
Economic Journal, 2022, Vol 132, Issue 644, p1449
- ISSN
0013-0133
- Publication type
Article
- DOI
10.1093/ej/ueab078