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The purpose of this paper is to show that outsourcing can occur as outcome of a separating or pooling perfect Bayesian equilibrium although it is not profitable under complete information. Therefore, asymmetric information can itself be a reason for outsourcing.

The present paper constructs a model of two firms interacting in the product market under asymmetric information where one firm has private information about its technological capability, and it has the option to produce inputs in-house or buy inputs from an input market. However, using outsourced inputs involves a fixed cost at the plant level. The model solves for perfect Bayesian equilibrium.

There are situations when under complete information, outsourcing of the input will not occur, but, under incomplete information, either only the low-cost type or both high and low-cost types will go for outsourcing, and there always exist reasonable beliefs supporting these equilibria. In particular, when the fixed cost is neither too small not too large, a separating equilibrium occurs in which the low-cost type outsources inputs from the input market but the high-cost type produces in-house; hence, outsourcing signals the firm’s type. Outsourcing by only the high-cost type firm will never occur in equilibrium.

That incomplete or asymmetric information can itself be a reason for strategic outsourcing is never identified in the literature. The present paper is an attempt to fill this gap and raise the issue of outsourcing in an incomplete information environment.

This chapter proposes a survey of the main results produced by the literature on licensing and some original insights, with a particular focus on globalization, North–South models of technology transfer, the issue of how the intellectual property rights influences international licensing, and asymmetric information.

The purpose of this paper is to analyse the incidence of child labour in developing countries, focusing on the role of parental attitude towards education combined with the returns to education in deciding between child labour and child education.

Using an inter‐temporal decision making framework, it is assumed that parents decide on the extent of schooling for their children.

Though education enhances the productivity of a worker and thereby increases the wage of an educated worker, it was found that a portion of children drop out of school before completion and join the workforce as the returns from full schooling are not high enough. This happens even when parents intrinsically value education and also because of the wage premium, which is a strictly positive function of the time spent in school. The paper examines the effectiveness of standard policies like compulsory schooling or financial incentives in reducing the incidence of child labour and finds that the effects of some of the policies are ambiguous.

The existing literature mainly focuses on poverty as the main reason for the incidence of child labour and usually views child labour through the lens of credit market imperfections. Unlike the existing literature, this paper emphasises the role of parental attitude towards education and the wage premium associated with schooling.

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

This paper aims to strive to model virtual trade resulting from time zone differences in an otherwise Heckscher–Ohlin set up which is absent in the literature. So, the paper adds some value to the existing literature on time zones (TZ) and trade.

A competitive general equilibrium model is developed first to capture the effect of TZ differences on virtual trade. Then the authors examine, in brief, if distance can be accommodated in such framework. Finally, the authors extend the model to incorporate informality.

It is seen that exploitation of time zone difference benefits skilled labor and hurts capital under reasonable assumption. In what follows, time zone difference exploiting sector expands, whereas the other sector contracts. Then, the model has been extended to examine how distance may also lead to similar outcomes. In addition, the model is further modified to explore the effect of virtual trade in an informality and associated extortion ridden economy. Interestingly, virtual trade turns out to be beneficial to unskilled workers as well, and leads to a fall in the number of extortionists, though informal production is augmented.

This model is a competitive model that may not clearly reflect the realistic world. However, interestingly this may form the basis of looking into some other appealing dimensions of the real world.

TZ and related communication-cost-driven trade arguments are relatively less explored theoretically. Therefore, the work adds some value to the theoretical understanding of outsourcing in service trade that uses day-night differences across the globe.