oligopolies

• The Labour Market Effects of Outsourcing Parts and Components: A Simple Model with Cournot Competition

This paper analyses a partial equilibrium outsourcing model with Cournot competition in intermediate good production. Final production is located in Western Europe, whereas the intermediate good can be manufactured by a Western (outsourcing) or Eastern European supplier (offshore outsourcing). The paper asks the question how changes in production costs, in particular wages, affect labor input in the two regions in the presence of Cournot competition. The main results are: higher production costs in one region reduce intermediate good production in both regions leading to a substitution effect between high- and low-skilled labor intensive inputs rather than between Eastern and Western low-skilled labor intensive inputs. The sensitivity of outsourcing activities to production cost changes...

... an agglomeration tendency towards oligopolies of "mega suppliers" exploiting scale effects and b...

• Aussenwirtschaft; Zeitschrift für internationale Wirtshaftsbeziehungen
• Vol. 63 Num. 2, Juin 2008