International Outsourcing and Factor Prices With Multistage Production

@inproceedings{Kohler2004InternationalOA,
  title={International Outsourcing and Factor Prices With Multistage Production},
  author={W. Reinert K. Kohler},
  year={2004}
}
We develop a dual representation of the technology of international fragmentation for an industry using 2 factors in a continuum of stages. We then derive a generalised factor price frontier which incorporates an endogenous adjustment of the margin fragmentation. Using this frontier in a 2×2 general equilibrium model, we investigate the role of outsourcing in the adjustment to a decline in the final output price of the multistage industry, and the attendant factor price effects. We also explore… CONTINUE READING

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