Biswajit Mandal

This article incorporates international transfer of financial capital, a process that is essential to the offshoring of labour services across time zones but has been ignored. Considering two identical countries, we check the effect of utilisation of time-zone difference, which involves virtual transfer of financial capital along with labour services. Time-zone difference reduces the production time, enabling producers to repay the borrowed financial capital earlier and incur a lower interest rate compared to autarky. Consequently, both countries experience an increase in productivity. Further, because of the inclusion of financial capital transfer, both countries experience different changes in their factor prices. This implies that it becomes necessary for policy makers to decide whether to promote their country as a source or a host. JEL Codes: F12, F16, F21

This paper constructs a competitive trade model involving countries in two distinct time zone locations. Our results suggest that geographical distance positively impact service trade, in contrast to its harmful nature for goods trade. These results are not in line with the traditional gravity arguments of international trade. Our model also reveals an intriguing relationship: an increase in distance between trading nations results in higher skilled wages and lower rent in case of service trade, while goods trade yields the opposite effect. We then connect distance with delaying cost and find the effects of delaying cost on trade and factor prices. We further extend our basic model to introduce informal sector and government manufacturing sector. Despite these additions, the consistency in the effects of distance on factor prices and output persists.

We introduce factor specificity to reflect the cost of adjustment of reallocating factors between technologies that determine fixed costs and variable costs in a typical Dixit–Stiglitz–Krugman (DSK) model of trade, retaining all other standard specifications of such a framework. We show that such an apparently benign change fundamentally alters the results of the DSK model. The number of varieties and output per variety depends entirely on full employment conditions. Thus, DSK and Heckscher–Ohlin–Samuelson (HOS) models, which represent the major workhorses of old trade theory, converge in the sense that now the number of varieties and outputs per variety are completely determined by factor endowments.

We check the role of time‐zone difference on offshoring of service tasks when the skill of labors varies between the partner countries. We frame a model where partner countries are located in non‐overlapping time zones, and the skill level of the partner‐country labors is lower. In our model, service production is divided into two sequential stages, and output is a supermodular function of the skill of labors and time. The problem of the producers is to choose between domestic production and offshoring. Domestic production employs high‐skill labors though the time management is inefficient. On the other hand, offshoring to a non‐overlapping time zone helps to work round the clock and reduce the cost, but the lower expertise of skilled labor lowers the output. In such a framework, we check conditions for beneficial offshoring. The condition derived in our analysis provides combinations of skill and time that can make offshoring beneficial. Results show that offshoring across time zones is beneficial even when the complexity of stages of production vary. However, only the relatively less‐critical task is offshored. We further find that availability of domestic low‐skill labor does not benefit the firm, while foreign low‐skill labor may be beneficially utilized through time‐zone exploitation.

Using NFHS-4 data, this study explores the determinants of maternal health care programmes for eastern states of India, which include prenatal care and hospital delivery. To reduce unobserved heterogeneity in the analysis, we employed the Full Information Likelihood Method, also known as the Joint Estimation Technique, in conjunction with individual probit models. Like other studies, we found place of residence, wealth, caste, religion and level of education as significant contributor for demand for both services. But, unlike earlier studies, we found that women’s age increases the use of prenatal care and hospital delivery, and the child’s birth order influences getting prenatal care. To increase the utilisation of maternal health care services, we recommend investing in health infrastructure, increasing the Janani Suraksha Yojana (JSY) subsidy amount and coverage of the Janani Shishu Suraksha Karyakram (JSSK) scheme, and promoting awareness about various government programmes among women through the Accredited Social Health Activists (ASHAs). JEL Codes: I140, I150, I180, O150