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Regional production networks, service offshoring, and productivity in East Asia

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  • Kang, Moonsung
  • Kim, Hyuk Hwang
  • Lee, Hongshik
  • Lee, Joonhyung

Abstract

Using the Asian International Input-Output Table (1990, 1995, and 2000), this paper explores regional production networks and offshoring of material and service inputs in East Asia. In doing so, offshoring is measured directly from the Table, which has not been used in previous literature regarding this issue. It turns out that East Asian countries source significant shares of inputs within East Asia. In addition to material offshoring, service offshoring in East Asia has become increasingly common in the era of globalization. We also evaluate the effects of this fast growing offshoring on productivity. Our econometric results demonstrate that offshoring exerts a significant and positive impact on total factor productivity in East Asia. Service offshoring, in particular, performs a more significant role than material offshoring.

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Bibliographic Info

Article provided by Elsevier in its journal Japan and the World Economy.

Volume (Year): 22 (2010)
Issue (Month): 3 (August)
Pages: 206-216

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Handle: RePEc:eee:japwor:v:22:y:2010:i:3:p:206-216

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Web page: http://www.elsevier.com/locate/inca/505557

Related research

Keywords: Regional production networks Service offshoring Productivity;

References

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  1. Görg, Holger & Hanley, Aoife, 2009. "Services outsourcing and innovation: An empirical investigation," CEPR Discussion Papers 7390, C.E.P.R. Discussion Papers.
  2. Keller, Wolfgang, 2002. "International Technology Diffusion," CEPR Discussion Papers 3133, C.E.P.R. Discussion Papers.
  3. Görg, Holger & Hanley, Aoife & Strobl, Eric, 2007. "Productivity Effects of International Outsourcing: Evidence from Plant Level Data," CEPR Discussion Papers 6361, C.E.P.R. Discussion Papers.
  4. Rosario Crinò, 2008. "Service offshoring and productivity in Western Europe," Economics Bulletin, AccessEcon, vol. 6(35), pages 1-8.
  5. WAKASUGI Ryuhei & ITO Banri & TOMIURA Eiichi, 2008. "Offshoring and Trade in East Asia: Statistical Evidence," Discussion papers 08009, Research Institute of Economy, Trade and Industry (RIETI).
  6. Hanson, Gordon H, 1996. "Localization Economies, Vertical Organization, and Trade," American Economic Review, American Economic Association, vol. 86(5), pages 1266-78, December.
  7. Prema-chandra Athukorala, 2006. "Multinational Production Networks and the New Geo-economic Division of Labour in the Pacific Rim," Departmental Working Papers 2006-09, The Australian National University, Arndt-Corden Department of Economics.
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