Offshoring, intended as the relocation of a business’s productive structure to a country different from the origin one, is a widespread phenomenon, along with reshoring, its inverse: causes are varied, ranging from economies of localisation, convenience in input prices, government incentives. This thesis analyses a two-country model (North and South) in which the location of production is represented by a controlled Markov chain: firms (with homogeneous characteristics and identified by a representative agent) can costly increase the rate of probability of transitioning from one country to the other in a finite time interval. The optimal choice of firms is derived from a backward differential equation that represents at each instant the value attached to offshoring. The defining characteristic of the countries is that input prices in the South are lower, while the North can give monetary incentives to firms at the end of the programming interval, defining the terminal value of a Cauchy’s problem. The effects of different parameters on the offshoring and reshoring times are analysed, along with the cost for each country of reacting to the modification of some parameters by the other.
L’offshoring - cioè la rilocalizzazione della struttura produttiva di un’azienda in un paese diverso da quello d’origine - è un fenomeno diffuso, assieme al suo inverso, il reshoring: le cause sono varie, dalle economie di localizzazione alla convenienza nei prezzi degli input produttivi agli incentivi statali. Questa tesi analizza un modello a due paesi (Nord e Sud) in cui la localizzazione della produzione è rappresentata da una catena di Markov controllata: le aziende (con caratteristiche omogenee e individuate da un agente rappresentativo) possono aumentare pagando un prezzo il tasso di probabilità di passare da un paese all’altro. La scelta ottima delle aziende è derivata da un’equazione differenziale backward che rappresenta in ogni istante il valore attribuito all’offshoring. La caratteristica distintiva dei due stati è che i prezzi degli input sono inferiori (per il Sud), mentre il Nord può offrire degli incentivi monetari alle aziende alla fine dell’intervallo di programmazione, definendo il valore finale del problema di Cauchy. Gli effetti dei diversi parametri sul tempo di offshoring e reshoring sono analizzati, assieme al costoper ogni paese di reagire alla modifica del sistema da parte dell’altro.
Offshoring and Reshoring: a Model Based on Continuous-Time Markov Chain
FIDANZA, FABRIZIO
2023/2024
Abstract
Offshoring, intended as the relocation of a business’s productive structure to a country different from the origin one, is a widespread phenomenon, along with reshoring, its inverse: causes are varied, ranging from economies of localisation, convenience in input prices, government incentives. This thesis analyses a two-country model (North and South) in which the location of production is represented by a controlled Markov chain: firms (with homogeneous characteristics and identified by a representative agent) can costly increase the rate of probability of transitioning from one country to the other in a finite time interval. The optimal choice of firms is derived from a backward differential equation that represents at each instant the value attached to offshoring. The defining characteristic of the countries is that input prices in the South are lower, while the North can give monetary incentives to firms at the end of the programming interval, defining the terminal value of a Cauchy’s problem. The effects of different parameters on the offshoring and reshoring times are analysed, along with the cost for each country of reacting to the modification of some parameters by the other.File | Dimensione | Formato | |
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https://hdl.handle.net/20.500.12608/68913