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International Outsourcing and Welfare Reduction: an Entry-deterrence Story

Author

Listed:
  • Arijit Mukherjee
  • Yingyi Tsai
Abstract
We show that international outsourcing may reduce welfare of the outsourcing country by deterring market-entry, thus showing a new effect which is different from the employment and the quality effects creating negative impacts of outsourcing. Entry deterrence under outsourcing reduces domestic welfare if both the profit extraction and cost saving from outsourcing are sufficiently small.

Suggested Citation

  • Arijit Mukherjee & Yingyi Tsai, 2008. "International Outsourcing and Welfare Reduction: an Entry-deterrence Story," Discussion Papers 08/45, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:08/45
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    File URL: https://www.nottingham.ac.uk/gep/documents/papers/2008/08-45.pdf
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    References listed on IDEAS

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    Cited by:

    1. Tarun Kabiraj & Uday Bhanu Sinha, 2014. "Strategic Outsourcing with Technology Transfer under Cournot Competition," Economics Bulletin, AccessEcon, vol. 34(2), pages 1133-1140.
    2. Kabiraj, Tarun & Sinha, Uday Bhanu, 2016. "Strategic outsourcing with technology transfer under price competition," International Review of Economics & Finance, Elsevier, vol. 44(C), pages 281-290.
    3. Cao, Jiyun & Mukherjee, Arijit & Sinha, Uday Bhanu, 2018. "Firm-asymmetry and strategic outsourcing," International Review of Economics & Finance, Elsevier, vol. 53(C), pages 16-24.
    4. Tarun Kabiraj & Uday Bhanu Sinha, 2011. "Strategic Outsourcing with Technology Transfer," Working papers 203, Centre for Development Economics, Delhi School of Economics.
    5. Doriani LINGGA & Damiana SIMANJUNTAK, 2024. "Entry Mode In The Presence Of International Outsourcing," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 19(1), pages 317-333, April.

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    Keywords

    Entry; Outsourcing; Welfare;
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