Offshoring: Facts and numbers at the country level

Agnese, Pablo and Joan Enric, Ricart (2009): Offshoring: Facts and numbers at the country level.

Abstract

Offshoring has lately received wide attention. Its potential effects, mainly to be materialized in employment and productivity dislocations, are yet to be fully assessed. However, some consensus has been attained as to how to proxy its theoretical definition at an aggregate level. Here we review the most conventional indices the economic literature has so far produced, and employ them to provide an overview of the extent of the phenomenon for a group of countries. Contrary to common beliefs, our data reveal that offshoring is not exclusive of large developed economies. Further, we highlight the continuing prominence of the manufacturing over the services sector, and observe that while services offshoring is on the rise, it still represents a small fraction of total offshoring.

• Item Type: MPRA Paper
• Language: English
• Keywords: offshoring; intermediate trade; aggregate data
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F40 - General; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade

References

Amiti, M. and S-J. Wei, 2005, Fear of service outsourcing: Is it justified?, Economic Policy 20 (42), 308-347.

Amiti, M. and S-J. Wei, 2006, Service offshoring, productivity, and employment: Evidence from the United States, CEPR Discussion Paper 5475.

Arndt, S., 1997, Globalization and the Open Economy, North American Journal of Economics and Finance 8 (1), 71-79.

Arndt, S., 1998, Super-specialization and the gains from trade, Contemporary Economic Policy 16 (4), 480-485

Arndt, S., 1999, Globalization and economic development, Journal of International Trade and Economic Development 8 (3), 309-318.

Campa, J. and L. Goldberg, 1997, The evolving external orientation of manufacturing industries: Evidence from four countries, Federal Reserve Bank of New York Economic Policy Review 4, 79--99.

Canals, C., 2006, What explains the widening wage gap? Outsourcing vs. technology, La Caixa Working Paper Series 01/2006

Deardoff, A., 1998, Fragmentation across cones, The University of Michigan Discussion Paper 427.

Deardoff, A., 2001, Fragmentation in simple trade models, North American Journal of Economics and Finance 12 (2), 121-137.

Egger, H., 2002, International outsourcing in a two-sector Heckscher-Ohlin model, Journal of Economic Integration 17 (4), 687-709.

Egger, H. and P. Egger, 2003, Outsourcing and skill-specific employment in a small economy: Austria after the fall of the Iron Curtain, Oxford Economic Papers 55 (4), 625-643.

Feenstra, R. and G. Hanson, 1996a, Foreign investment, outsourcing, and relative wages, in: R. Feenstra, G. Grossman and D. Irwin, eds., The political economy of trade policy: Papers in honor of Jagdish Bhagwati (MIT Press: Cambridge, MA), 89-127.

Feenstra, R. and G. Hanson, 1996b, Globalization, outsourcing, and wage inequality, The American Economic Review 86 (2), 240-245.

Feenstra, R. and G. Hanson, 1997, Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras, Journal of International Economics 42 (3/4), 371-393.

Feenstra, R. and G. Hanson, 1999, The impact of outsourcing and high-technology capital on wages: Estimates for the United States, 1979-1990, The Quarterly Journal of Economics 114 (3), 907-940.

Feenstra, R. and G. Hanson, 2001, Global production sharing and rising inequality: A survey of trade and wages, NBER Working Paper 8372, forthcoming. In: K. Choi, & J. Harrigan, eds., Handbook of International Trade (Basil Blackwell: Malden).

Forrester Research, 2004, Near-term growth of offshoring accelerating (Cambridge, MA).

Horgos, D., 2008, Labor market effects of international outsourcing: how measurement matters, International Review of Economics and Finance, forthcoming; doi: 10.1016/j.iref.2008.10.006.

Hummels, D., Ishii, J. and K-M. Yi, 2001, The Nature and Growth of Vertical Specialization inWorld Trade, Journal of International Economics 54 (1), 75-96.

IMF World Economic Outlook Database, 2009.

Jones, R., 2000, Globalization and the theory of input trade (MIT Press: Cambridge, MA).

Jones, R. and H. Kierkowski, 1990, The role of services in production and international trade: A theoretical framework. In: R. Jones and A. Krueger, eds., The political economy of international trade.(Blackwell's: Oxford), 31-48.

Jones, R. and H. Kierkowski, 2001, A framework for fragmentaton. In: S. Arndt and H. Kierzkowski, eds., Fragmentation: New production patterns in the world economy. (Oxford University Press: Oxford), 17--34.

Kirkegaard, J., 2007, Offshoring, outsourcing, and production relocation. Labor market effects in the OECD countries and developing Asia, IIE Working Paper 07-02

Kohler, W., 2004, International outsourcing and factor prices with multistage production, Economic Journal, 114 (494), 166-185.

Mankiw, N. and P. Swagel, 2006, The politics and economics of offshore outsourcing, Journal of Monetary Economics 53 (5), 1027-1056.

McKinsey Global Institute, 2003, Who wins in offshoring, The McKinsey Quarterly 4.

OECD Input-Output Database, 2009.

OECD Offshoring and employment. Trends and impacts, 2007.

Strauss-Kahn, V., 2004, The role of globalization in the within-industry shift away from unskilled workers in France, in: R. Baldwin and A. Winters, eds., Challenges to Globalization (University of Chicago Press: Chicago).