Vertical Foreign Direct Investment versus Outsourcing: A Welfare Comparison from the Perspective of a Host Country

In the offshoring literature, there is a huge disconnect between the alternative modes of organizing offshore production and their relative welfare impact on a host country. We bridge this gap by comparing the welfare of a host country from vertical foreign direct investment (VFDI) vis-a-vis interna...

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Bibliographic Details
Main Author:	Goswami, Arti Grover
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Multinational Firms International Business F230 Contracting Out Joint Ventures Technology Licensing L240
Online Access:	http://hdl.handle.net/10986/5793

id	okr-10986-5793
recordtype	oai_dc
spelling	okr-10986-57932021-04-23T14:02:23Z Vertical Foreign Direct Investment versus Outsourcing: A Welfare Comparison from the Perspective of a Host Country Goswami, Arti Grover Multinational Firms International Business F230 Contracting Out Joint Ventures Technology Licensing L240 In the offshoring literature, there is a huge disconnect between the alternative modes of organizing offshore production and their relative welfare impact on a host country. We bridge this gap by comparing the welfare of a host country from vertical foreign direct investment (VFDI) vis-a-vis international outsourcing. Our model finds that the ability to maximize welfare in the alternative modes of organizing offshore production is contingent on the absorptive capacity of the host country. If a host country's absorptive capacity is above a critical threshold, outsourcing is more welfare enhancing vis-a-vis VFDI; while even with an absorptive capacity lower than this critical threshold, outsourcing being welfare improving over VFDI cannot be ruled out. 2012-03-30T07:34:34Z 2012-03-30T07:34:34Z 2011 Journal Article Review of Development Economics 13636669 http://hdl.handle.net/10986/5793 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Multinational Firms International Business F230 Contracting Out Joint Ventures Technology Licensing L240
spellingShingle	Multinational Firms International Business F230 Contracting Out Joint Ventures Technology Licensing L240 Goswami, Arti Grover Vertical Foreign Direct Investment versus Outsourcing: A Welfare Comparison from the Perspective of a Host Country
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	In the offshoring literature, there is a huge disconnect between the alternative modes of organizing offshore production and their relative welfare impact on a host country. We bridge this gap by comparing the welfare of a host country from vertical foreign direct investment (VFDI) vis-a-vis international outsourcing. Our model finds that the ability to maximize welfare in the alternative modes of organizing offshore production is contingent on the absorptive capacity of the host country. If a host country's absorptive capacity is above a critical threshold, outsourcing is more welfare enhancing vis-a-vis VFDI; while even with an absorptive capacity lower than this critical threshold, outsourcing being welfare improving over VFDI cannot be ruled out.
format	Journal Article
author	Goswami, Arti Grover
author_facet	Goswami, Arti Grover
author_sort	Goswami, Arti Grover
title	Vertical Foreign Direct Investment versus Outsourcing: A Welfare Comparison from the Perspective of a Host Country
title_short	Vertical Foreign Direct Investment versus Outsourcing: A Welfare Comparison from the Perspective of a Host Country
title_full	Vertical Foreign Direct Investment versus Outsourcing: A Welfare Comparison from the Perspective of a Host Country
title_fullStr	Vertical Foreign Direct Investment versus Outsourcing: A Welfare Comparison from the Perspective of a Host Country
title_full_unstemmed	Vertical Foreign Direct Investment versus Outsourcing: A Welfare Comparison from the Perspective of a Host Country
title_sort	vertical foreign direct investment versus outsourcing: a welfare comparison from the perspective of a host country
publishDate	2012
url	http://hdl.handle.net/10986/5793
_version_	1764396315178958848

Vertical Foreign Direct Investment versus Outsourcing: A Welfare Comparison from the Perspective of a Host Country

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