Chapter 4 Outsourcing and Import Restriction Policies

Abstract

Purpose – The purpose of this chapter is to examine the issues of outsourcing and corresponding policy interventions by the government.

Design/methodology/approach – This chapter begins with a situation in which no government interventions are allowed, and examine the government of the North, when it is allowed to intervene, can choose one of the three options: (a) to limit the quantity of each type of variety of the foreign intermediate inputs to be imported; (b) to limit the number of varieties of the foreign intermediate inputs to be imported; and (c) to impose a tariff on the imported intermediate inputs.

Findings – For each policy, the optimal intervention is derived.

Originality/value – The analysis can be used to examine the argument for restricting outsourcing.

Citation

Chu, K.-H. and Wong, K.-y. (2008), "Chapter 4 Outsourcing and Import Restriction Policies", Tran-Nam, B., Van Long, N. and Tawada, M. (Ed.) Globalization and Emerging Issues in Trade Theory and Policy (Frontiers of Economics and Globalization, Vol. 5), Emerald Group Publishing Limited, Leeds, pp. 37-55. https://doi.org/10.1016/S1574-8715(08)05004-5