Cookies?
Library Header Image
LSE Research Online LSE Library Services

Offshoring in a knowledge economy

Antras, Pol, Garicano, Luis and Rossi-Hansberg, Esteban (2006) Offshoring in a knowledge economy. Quarterly Journal of Economics, 121 (1). pp. 31-77. ISSN 0033-5533

Full text not available from this repository.

Abstract

How does the formation of cross-country teams affect the organization of work and the structure of wages? To study this question, we propose a theory of the assignment of heterogeneous agents into hierarchical teams, where less skilled agents specialize in production and more skilled agents specialize in problem solving. We first analyze the properties of the competitive equilibrium of the model in a closed economy, and show that the model has a unique and efficient solution. We then study the equilibrium of a two-country model (North and South), where countries differ in their distributions of ability, and in which agents in different countries can join together in teams. We refer to this type of integration as globalization. Globalization leads to better matches for all southern workers but only for the best northern workers. As a result, we show that globalization increases wage inequality among nonmanagers in the South, but not necessarily in the North. We also study how globalization affects the size distribution of firms and the patterns of consumption and trade in the global economy.

Item Type: Article
Official URL: http://www.mitpressjournals.org/loi/qjec
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
Sets: Research centres and groups > Managerial Economics and Strategy Group
Departments > Management
Research centres and groups > Centre for Economic Performance (CEP)
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 27 Oct 2009 16:54
URL: http://eprints.lse.ac.uk/25553/

Actions (login required)

Record administration - authorised staff only Record administration - authorised staff only