Offshoring on the Value Chain As the costs of capital or trade fall in the Foreign country, a Home firm will find it profitable to offshore more activities. Offshoring shifts the dividing line between Home and Foreign production from A to B. The activities between A and B, which formerly were done at Home, are now done in Foreign. Notice that these activities are more skill-intensive than the activities formerly done in Foreign (to the left of A) but less skill-intensive than the activities now done at Home (to the right of B).