Abstract
International outsourcing involves the import of intermediate inputs or services from unaffiliated foreign suppliers. While it implies that the production of a final product involves production activities in more than one country, this trade in intermediate inputs can be explained by traditional theories of international trade where countries have comparative advantage in different stages of production. However, since outsourcing relationships involve interaction with foreign partners, the choice of organizational form for these transactions is also influenced by industrial organization factors, such as search costs or contract incompleteness. This article discusses these issues and the effects of outsourcing on the international economy.
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Swenson, D.L. (2018). International Outsourcing. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2315
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2315
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