Loughborough University. Department of Economics. Discussion Paper Series;WP 2009_08
This note explores the value of search capital in interim matches in the outsourcing trade, by extending
Rauch and Casella s (2003) framework to a dynamic model of matching and searching. On provisional calculations, the sunken cost of this search imposes a similar order of magnitude trade barrier to most tariffs, and
would be expected to affect both the intensive and extensive margins of trade.
This is a working paper. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2009_08.html