460case#3

460case#3 - Economics 460 P Conway 13 April 2010 Case Study...

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Economics 460 13 April 2010 P. Conway Case Study 3: The Problems of Offshoring Following upon (and based upon) our class discussion, use the blank area below (one side only) to answer these questions. Sign the pledge at the bottom to indicate that you complied with the UNC Honor Code in completing these questions. 1. Define carefully the concept of offshoring based upon the Mankiw and Blinder readings. Do the motivations of offshoring fall into the OLI categories for foreign investment we discussed in class? Explain carefully. Mankiw and Blinder agree that offshoring is the transfer of jobs (but not workers) from a domestic location to a foreign location. Both focus upon services jobs; Mankiw seems to consider only service jobs, while Blinder considers any type of job. Blinder considers it a phenomenon most likely to occur from rich to poor country. The OLI framework is defined for foreign direct investment, while offshoring can be facilitated either by foreign investment or by an arms-length contract. That said, the ownership motivation for
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460case#3 - Economics 460 P Conway 13 April 2010 Case Study...

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