Offshoring Production: A Simple Model of Wages, Productivity, and Growth

Davis, Colin; Naghavi, Alireza

doi:10.1111/j.1465-7295.2010.00293.x

Cited by 20 publications

(12 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…4 Feenstra and Kee (2007) Hsu (2011), Chen (2015, and Chu (2015) also present a North-South product-cycle model with outsourcing. 6 Davis and Naghavi (2011) examine the relationship between trade liberalization, offshoring, and labor allocation in an endogenous growth model in which there is heterogeneity of worker skills. 7 Acemoglu et al (2015) only conduct quantitative welfare analysis.…”

Section: End Notesmentioning

confidence: 99%

See 1 more Smart Citation

A North–South model of outsourcing and growth

Saito

2018

Review Development Economics

View full text Add to dashboard Cite

In this paper, I formulate a simple North–South R&D‐based growth model where final goods firms in the North endogenously determine the range of international outsourcing of intermediate goods to the South. I show that a fall in the trade cost (through trade liberalization) of intermediate goods in the North: (i) reduces the wage of the North relative to that of the South; (ii) increases the outsourced variety of intermediate goods in the North; and (iii) stimulates Northern R&D activity and economic growth in both countries. By conducting welfare analysis, I also show that a decline in the trade cost of intermediate goods in the North improves welfare in the South more than in the North.

show abstract

Section: End Notesmentioning

confidence: 99%

“… Davis and Naghavi () examine the relationship between trade liberalization, offshoring, and labor allocation in an endogenous growth model in which there is heterogeneity of worker skills. …”

mentioning

confidence: 99%

A North–South model of outsourcing and growth

Saito

2018

Review Development Economics

View full text Add to dashboard Cite

show abstract

“…Both interpretations, however, lead to the same conclusion: under certain conditions, skilled emigration could be beneficial for growth in the sending countries. 13 …”

Section: Figure 1 About Here]mentioning

confidence: 99%

“…Higher moving costs  deter emigration and preserve the size of the innovation sector; higher training costs to work in the innovation sector  decrease the size by preventing the low skilled from entering the innovation sector; higher prospective wages abroad   encourage the flow of skills away from the country, while higher wages in the innovation sector at home   attract workers from the production sector and reduce skilled emigration. 13 Using   instead of   from (2) to find the threshold in (15) follows from the assumption that a worker does not take into account potential spillovers of knowledge learned by emigrants abroad, when choosing his occupation or deciding whether or not to migrate. This assumption avoids the anticipation of potential benefits from diaspora and free-riding on migration by others.…”

Section: Lemmamentioning

confidence: 99%

Intellectual Property Rights, Migration and Diaspora

Naghavi

Strozzi

2011

SSRN Journal

Self Cite

View full text Add to dashboard Cite

In this paper we study theoretically and empirically the role of the interaction between skilled migration and intellectual property rights (IPRs) protection in determining innovation in developing countries (South). We show that although emigration from the South may directly result in the well-known concept of brain drain, it also causes a brain gain effect, the extent of which depends on the level of IPRs protection in the sending country. We argue this to come from a diaspora channel through which the knowledge acquired by emigrants abroad can flow back to the South and enhance the skills of the remaining workers there. By increasing the size of the innovation sector and the skill-intensity of emigration, IPRs protection makes it more likely for diaspora gains to dominate, thus facilitating a potential net brain gain. Our main theoretical insights are then tested empirically using a panel dataset of emerging and developing countries. The findings reveal a positive correlation between emigration and innovation in the presence of strong IPRs protection.J.E.L. Classification: O34; F22; O33; J24; J61.

show abstract

“…Davis and Naghavi () study the effects of offshoring on innovation and wage inequality in an occupational choice model with heterogenous workers' skills and endogenous growth.…”

mentioning

confidence: 99%

Global Innovation Races, Offshoring and Wage Inequality

Impullitti

2015

Rev International Economics

View full text Add to dashboard Cite

In the 1970s and 1980s the US position as the global technological leader was increasingly challenged by Japan and Europe. In those years the US skill premium and residual wage inequality increased substantially. This paper presents a two-region, quality-ladder growth model where the lagging economy progressively catches up with the leader. As the innovation gap closes, the advanced country experiences fiercer foreign technological competition that forces its firms to innovate more. Faster technical change increases the skill premium and residual inequality. Offshoring production and innovation plays a key role in shaping the link between international competition and inequality.

show abstract

Offshoring Production: A Simple Model of Wages, Productivity, and Growth

Cited by 20 publications

References 26 publications

A North–South model of outsourcing and growth

A North–South model of outsourcing and growth

Intellectual Property Rights, Migration and Diaspora

Global Innovation Races, Offshoring and Wage Inequality

Contact Info

Product

Resources

About