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/lp/american-economic-association/industry-dynamics-of-offshoring-the-case-of-hard-disk-drives-tuY60LRGQg
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- Publisher
- American Economic Association
- Copyright
- Copyright © 2018 © American Economic Association
- ISSN
- 1945-7685
- DOI
- 10.1257/mic.20150256
- Publisher site
- See Article on Publisher Site
Abstract
AbstractThis paper uncovers a novel pattern of offshoring dynamics in a high-tech industry, and proposes a structural model to explain it. Specifically, the hard disk drive industry (1976–1998) witnessed massive waves of entry, exit, and the relocation of manufacturing plants to low-cost countries, in which shakeouts occurred predominantly among home firms and almost all survivors were offshore firms. I build and estimate a dynamic offshoring game with entry/exit to measure the benefits and costs of offshoring, investigate the relationship between offshoring and market structure, and assess the impacts of hypothetical government interventions. (JEL D24, D43, F14, L13, L24, L63, O14)
Journal
American Economic Journal: Microeconomics – American Economic Association
Published: Feb 1, 2018