Export Processing Zones [book]

1994 unpublished
This paper develops a simple model that incorporates di¤erent organizational forms into a task trading framework. The model is used to study how falling o¤shoring costs a¤ect home welfare and the relative prevalence of di¤erent organizational forms. It iden-ti...es an important source of productivity e¤ect: a fall of o¤shoring cost could lead to lower e¢ ciency wages paid by foreign-owned ...rms due to their segmented labor market, and the lower e¢ ciency wages consequently induce a larger
more » ... nduce a larger productivity gain. It also predicts that falling o¤shoring costs favor intra...rm o¤shoring if the o¤shoring cost function is steep enough or if intra...rm o¤shoring is su¢ ciently more e¢ cient in communication than armslength o¤shoring. The prediction is tested using export processing trade data in China and is strongly supported. JEL: F11, F14, F15, F16, F23
doi:10.1596/0-8213-1988-4 fatcat:6phoxk245ncntewynjworzljia