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Outsourcing and Factor Price Equalization
| Content Provider | Semantic Scholar |
|---|---|
| Author | Yun, Kwan Koo |
| Copyright Year | 2011 |
| Abstract | We show that outsourcing makes factor price equalization more likely by expanding the factor price equalization zone. Outsourcing also makes it more likely that the factor price equalization zone is full dimensional in the space of endowment allocations. Since the factor price equalization zone is usually high dimensional, it is diffi cult to represent it geometrically. When there are two factors, we can represent the factor price equalization condition by the lens condition: the factor use lens contains the country endowment lens. When outsourcing is available, we define the task lens and with it, a (generalized) lens condition: the task lens contains the country endowment lens. The lens condition with outsourcing is equivalent to the factor price equalization condition when there are two countries or two factors. Since the task lens contains the factor use lens, the lens condition is more likely to hold with outsourcing. The same analysis applies when there are other mobile factors. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.apeaweb.org/confer/bus11/papers/Yun_kk.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
