Essays on the Economics of Fragmentation

by Mulatero, Fulvio

I depart from traditional theories of production fragmentation to allow for the explicit consideration of frictions on the labor and product markets. These are crucial in yielding outcomes that cast some shadows on “optimistic” views of outsourcing that emerge from frictionless models. While in general the overall positive welfare effect is confirmed, the distributional consequences may be particularly adverse for some categories of workers. The three chapters that constitute the thesis deal, respectively, with the role played by the imperfect mobility of workers, imperfect competition in outsourcing industries, and imperfect factor price adjustments.