Offshoring and Directed Technical Change

We study the implications of offshoring on innovation, technology, and wage inequality in a Ricardian model with directed technical change. Profit maximization determines both the extent of offshoring and the direction of technological progress. A fall in the offshoring cost induces technical change...

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Bibliographic Details
Main Authors: Gancia, Gino (Author), Zilibotti, Fabrizio (Author), Acemoglu, K. Daron (Contributor)
Other Authors: Massachusetts Institute of Technology. Department of Economics (Contributor)
Format: Article
Language:English
Published: American Economic Association, 2018-02-13T17:49:49Z.
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Online Access:Get fulltext
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100 1 0 |a Gancia, Gino  |e author 
100 1 0 |a Massachusetts Institute of Technology. Department of Economics  |e contributor 
100 1 0 |a Acemoglu, K. Daron  |e contributor 
700 1 0 |a Zilibotti, Fabrizio  |e author 
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245 0 0 |a Offshoring and Directed Technical Change 
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856 |z Get fulltext  |u http://hdl.handle.net/1721.1/113625 
520 |a We study the implications of offshoring on innovation, technology, and wage inequality in a Ricardian model with directed technical change. Profit maximization determines both the extent of offshoring and the direction of technological progress. A fall in the offshoring cost induces technical change with an ambiguous factor bias. When the initial cost of offshoring is high, an increase in offshoring opportunities causes a fall in the real wages of unskilled workers in industrial countries, skill-biased technical change and rising skill premia. When the offshoring cost is sufficiently low, instead, offshoring induces technical change biased in favor of the unskilled workers. (JEL J24, J31, L24, O33) 
655 7 |a Article 
773 |t American Economic Journal: Macroeconomics