Heterogeneous Globalization: Offshoring and Reorganization
This paper exploits a direct measure of offshoring to study how the movement of production abroad affects the composition of firms’ domestic employment and production, as well as their innovative activities. After offshoring begins, firms increase their imports of domestically produced goods, and retain – rather than abandon – domestic production of those goods. We define a new measure of offshoring based on this relationship that enables us both to distinguish it from import competition and to identify new production cost saving opportunities in foreign countries. In response to such new offshoring opportunities, firms reallocate labor from production work to technology and innovation-related occupations. This reallocation of workers is accompanied by increases in offshoring firms’ product development and R&D spending. The results suggest a link between offshoring and domestic innovation.

Please sign up for meetings below:
Date: 19 February 2019, 14:30 (Tuesday, 6th week, Hilary 2019)
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room C
Speaker: Teresa Fort (The Tuck School of Business)
Organising department: Department of Economics
Part of: International Trade Seminar
Booking required?: Not required
Audience: Members of the University only
Editor: Melis Boya