TY  - JOUR
AU  - Head, Keith
AU  - Mayer, Thierry
TI  - Misfits in the Car Industry: Offshore Assembly Decisions at the Variety Level
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 25614
PY  - 2019
Y2  - February 2019
DO  - 10.3386/w25614
UR  - http://www.nber.org/papers/w25614
L1  - http://www.nber.org/papers/w25614.pdf
N1  - Author contact info:
Keith Head
University of British Columbia
Sauder School of Business
2053 Main Mall
Vancouver, BC  V6T 1Z2
CANADA
Tel: 6048228492
Fax: 6048228477
E-Mail: keith.head@sauder.ubc.ca

Thierry Mayer
Sciences-Po, Paris
Department of Economics
28 rue des Saints-Peres
75007 Paris
France
E-Mail: thierry.mayer@sciences-po.fr
M1  - published as Keith Head, Thierry Mayer. "Misfits in the Car Industry: Offshore Assembly Decisions at the Variety Level," in Shin-ichi Fukuda, Takeo Hoshi, and Fukunari Kimura, organizers, "Globalization and Welfare Impacts of International Trade" Elsevier, Journal of the Japanese and International Economies (2020)

M3  - presented at "27th NBER-TCER-CEPR Conference", July 27, 2018
AB  - This paper estimates the role of country-variety comparative advantage in the decision to offshore assembly of more than 2000 models of 197 car brands headquartered in 23 countries. While offshoring in the car industry has risen from 2000 to 2016, the top five offshoring brands account for half  the car assembly relocated to low-wage countries.  We show that the decision to offshore a particular car model depends on two types of cost (dis)advantage of the home country  relative to foreign locations. The first type,  the  assembly costs common to all models, is estimated via  a structural  triadic gravity equation. The second effect, model-level comparative advantage, is an interaction between proxies for the model's skill and capital intensity and   headquarter country's abundance in these factors.
ER  -