IDEAS home Printed from https://ideas.repec.org/a/oup/econjl/v132y2022i644p1449-1488..html
   My bibliography  Save this article

Exporting and Offshoring with Monopsonistic Competition

Author

Listed:
  • Hartmut Egger
  • Udo Kreickemeier
  • Christoph Moser
  • Jens Wrona

Abstract

We develop a model of international trade with heterogeneous firms and monopsonistically competitive labour markets. We show that due to monopsonistic competition our model makes sharply different predictions about the effects of the export of goods and the offshoring of tasks. Trade in goods is unambiguously welfare increasing as domestic resources are reallocated to large firms with high productivity and firms with low productivities exit the market thereby reducing the monopsony distortion present in autarky. Offshoring, however, gives firms additional scope for exercising monopsony power by reducing their domestic size and therefore can lead to welfare losses.

Suggested Citation

  • Hartmut Egger & Udo Kreickemeier & Christoph Moser & Jens Wrona, 2022. "Exporting and Offshoring with Monopsonistic Competition," The Economic Journal, Royal Economic Society, vol. 132(644), pages 1449-1488.
    • Handle: RePEc:oup:econjl:v:132:y:2022:i:644:p:1449-1488.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/ej/ueab078
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sabien Dobbelaere & Catherine Fuss & Mark Vancauteren, 2022. "Does offshoring shape labor market imperfections? A comparative analysis of Belgian and Dutch firms," Working Paper Research 425, National Bank of Belgium.
    2. Arni, Patrick & Egger, Peter & Erhardt, Katharina & Gubler, Matthias & Sauré, Philip, 2024. "Heterogeneous Impacts of Trade Shocks on Workers," CEPR Discussion Papers 19017, C.E.P.R. Discussion Papers.
    3. Egger, Hartmut & Kreickemeier, Udo & Moser, Christoph & Wrona, Jens, 2024. "Offshoring and job polarisation between firms," Journal of International Economics, Elsevier, vol. 148(C).
    4. Naumann, Fabrice & Bolz, Simon Johannes & Richter, Philipp Moritz, 2022. "Offshoring and Environmental Policy: Firm Selection and Distributional Effects," VfS Annual Conference 2022 (Basel): Big Data in Economics 264086, Verein für Socialpolitik / German Economic Association.
    5. Kamei, Keita, 2024. "A model of economic integration with ownership structure in general equilibrium oligopoly," Economics Letters, Elsevier, vol. 236(C).
    6. Luca Macedoni, 2022. "Monopsonistic competition, trade, and the profit share," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(2), pages 488-515, April.
    7. Priyaranjan Jha & Antonio Rodriguez-Lopez, 2021. "Minimum Wage and Employer Variety," CESifo Working Paper Series 9312, CESifo.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:econjl:v:132:y:2022:i:644:p:1449-1488.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.