复旦国际贸易英文课件07.pptVIP

Terms of Trade Fall in the Price of RD Samuelson was referring to this when he stated that outsourcing might allow developing countries to gain a comparative advantage in those activities where the U.S. once had the comparative advantage. For example, as Indian companies like Wipro engage in more RD, they compete directly with American companies exporting the same services. Competition can lower the world price of RD services. A fall in the world relative price of RD will lead to a steeper price line (PR falls). Home shifts production to point B′′, and by exporting RD and importing components, moves to point C′′. A Model of Outsourcing Figure 7.2 Panel (a) lists some of manufacture activities for a given product in the order in which they occur. The value chain in (b) lists these same activities in order of the amount of skilled/unskilled labor used in each. In panel (b), the assembly activity, on the left, uses the most unskilled labor, and RD, on the right, uses the most skilled labor. A Model of Outsourcing Value Chain of Activities The whole set of activities we just described is sometimes called the value chain for the products. Each activity adds more value to the combined product. Some of the activities can be transferred to other countries when it is more economical. By looking at activities in terms of their relative amount of skilled labor, we can predict which ones are likely to be transferred abroad. A Model of Outsourcing This prediction depends on several assumptions: Relative Wage of Skilled Workers We assume that Foreign wages for unskilled and skilled workers are less than those at Home. W*L WL and W*S WS Additionally, we assume the relative wage of unskilled labor is lower in foreign than at home. W*L / W*S WL/ WS Remember that unskilled labor in developing countries typically receives especially low wages. A Model of Outsourcing Costs of Capital and Trade Must take into account extra costs of doing business in the foreign country. Hi