Ngo Van Long a, Maxwell Tuuli b
Author information
a Department of Economics, McGill University, Montreal, Quebec, H3A 2T7, Canada
b Peter B. Gustavson School of Business, University of Victoria, Victoria, BC V8P 5C2, Canada
E-mail: ngo.long@mcgill.ca (Ngo Van Long), maxwelltuuli@uvic.ca (Maxwell Tuuli)
This paper demonstrates that an increase in bargaining power of Northern firms relative to that of their Southern contractors can trigger reshoring if the North-South wage differential is moderate, such that only industries with a high share of unskilled labor find outsourcing profitable. However, such an increase in Northern bargaining power can increase offshoring if the wage differential is so high that even industries with a low share of unskilled labor also offshore.
incomplete contracts, bargaining power, offshoring, reshoring
Ngo Van Long, Maxwell Tuuli. Offshoring and Reshoring: The Roles of Incomplete Contracts and Relative Bargaining Power. Front. Econ. China, 2018, 13(1): 32‒51 https://doi.org/10.3868/s060-007-018-0004-4