Dispelling Some Myths About Offshoring

Harrison, Ann E. and McMillan, Margaret S. (2006): Dispelling Some Myths About Offshoring. Published in: Academy of Management Perspectives , Vol. 20, No. 4 (November 2006): pp. 6-22.

Abstract

Critics of globalization claim that firms are being driven to shift employment abroad by the prospects of cheaper labor. Yet the evidence for this, beyond anecdotes, is slim. In this article, we review evidence on whether firms that do business in foreign countries are substituting foreign for domestic labor. We review the results of previous studies and present new firm-level evidence showing that, in fact, increases in employment in low-income countries do hurt employment at home. The premise that foreign expansion of U.S. multinationals encourages employment at home is a myth, but the domestic employment costs of offshoring are probably fairly small in magnitude.

• Item Type: MPRA Paper
• Language: English
• Keywords: Outsourcing, globalization, foreign labor, domestic labor, multinationals
• Subjects: J - Labor and Demographic Economics > J0 - General > J08 - Labor Economics Policies; F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics > M55 - Labor Contracting Devices

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