Innovation and wage effects of international outsourcing Academic Article

abstract

• We investigate the effects of increased outsourcing of production to a low wage country. Such international outsourcing lowers the marginal cost of production and thus increases profits, creating greater incentives for innovation. A reduction in the resource requirement in adapting technology relative to improving products or an expansion in the portion of production that can be outsourced generates a greater extent of international outsourcing, a lower relative wage and a faster rate of innovation. An increase in production taxes in the North, production subsidies in the South, or a subsidy to adapting technologies has similar effects. 2001 Elsevier Science B.V. All rights reserved.

authors

• Glass, Amy

published proceedings

• EUROPEAN ECONOMIC REVIEW

altmetric score

• 12

author list (cited authors)

• Glass, A. J., & Saggi, K.

citation count

• 142

complete list of authors

• Glass, AJ||Saggi, K

publication date

• January 2001

publisher

• Elsevier  Publisher

published in

• European Economic Review  Journal

keywords

• Adaptation
• Innovation
• International Outsourcing

Digital Object Identifier (DOI)

• 10.1016/S0014-2921(99)00011-2

start page

• 67

end page

• 86

volume

• 45

issue

• 1

URL

• http%3A%2F%2Fdx.doi.org%2F10.1016%2Fs0014-2921%2899%2900011-2