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Offshoring And The Polarization Of The Demand For Capital

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  • Dirk Bursian
  • Arne J. Nagengast

Abstract

In the past decades, the importance of different capital goods has gradually changed, which has led to a structural shift in the composition of the demand for capital at the expense of more traditional capital inputs such as machinery and equipment. In this paper, we focus on a novel driver of this development by analyzing the effect of offshoring on the demand for capital by asset class using a rich country‐sector panel dataset. Estimating a system of factor demand equations, we document that offshoring reduces the relative demand for non‐ICT capital, thereby polarizing the demand for capital. (JEL F14, F62, E22)

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  • Dirk Bursian & Arne J. Nagengast, 2020. "Offshoring And The Polarization Of The Demand For Capital," Economic Inquiry, Western Economic Association International, vol. 58(1), pages 260-282, January.
    • Handle: RePEc:bla:ecinqu:v:58:y:2020:i:1:p:260-282
    DOI: 10.1111/ecin.12828
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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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