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Question 2 Offshoring - Feenstra Hanson Model (350 words) Select one product that India...

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Finance

Question 2 Offshoring - Feenstra Hanson Model (350 words) Select one product that India (host country) exports under the close collaboration with a multinational corporation (MNC).

a. Investigating the list of different tasks in the production, and clearly specify which tasks are high/medium/low skilled intensive, and in the country where each task is performed. Explain the reasoning of why the tasks are allocated in such a way and if it fits with the Feenstra Hanson Model.

b. Collect minimum wage rates and the Gini index in the host country and in the country of the MNCs headquarter (home country) in the past 20 years (based on availability of data). What has actually happened to inequality in each country?

c. What is the FHM models prediction on the inequality in each country over time? Does this prediction fit with the data in 2a? Why or why not?

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