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Wiley InterScience | |||
  The Economic JournalVolume 114 Issue 494, Pages C166 - C185 Published Online: 4 Mar 2004 Journal compilation © 2010 by the Royal Economic Society (Registered Charity No. 231508) Published on behalf of the Royal Economic Society
Abstract | References | Full Text: HTML, PDF (Size: 163K) | Related Articles | Citation Tracking  International outsourcing and factor prices with multistage production* Copyright 2004 Royal Economic Society ABSTRACTWe develop a dual representation of the technology of international fragmentation for an industry using 2 factors in a continuum of stages. We then derive a generalised factor price frontier which incorporates an endogenous adjustment of the margin of fragmentation. Using this frontier in a 2 × 2 general equilibrium model, we investigate the role of outsourcing in the adjustment to a decline in the final output price of the multistage industry, and the attendant factor price effects. We also explore the implications of an improved technology of international fragmentation on the margin of fragmentation and on domestic factor prices. | 
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