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Offshoring and Productivity: Evidence from Japanese Firm-level Data

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  • ITO Banri
  • WAKASUGI Ryuhei
  • TOMIURA Eiichi

Abstract

It is noteworthy that multinational firms are beginning to offshore a wide range of operations. Theoretical studies have showed that offshoring contributes to a higher productivity. This paper aims to provide evidence of the effect of offshoring on productivity, on the basis of original 2006 survey data of offshore sourcing of Japanese firms. Our estimation shows that the offshoring of tasks for production of intermediates goods and final assembly, as well as the offshoring of tasks for R&D and information services, positively affects productivity growth, while the outsourcing of other service tasks has no significant impact on productivity. It also shows that firms outsourcing to the United States or Europe have realized high production efficiency, followed by firms outsourcing to Asia, in comparison with non-offshoring firms.

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Bibliographic Info

Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 08028.

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Length: 28 pages
Date of creation: Aug 2008
Date of revision:
Handle: RePEc:eti:dpaper:08028

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References

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  1. Alexander Hijzen, & Tomohiko Inui, & Yasuyuki Todo, . "Does Offshoring Pay? Firm-Level Evidence From Japan," Discussion Papers 07/14, University of Nottingham, GEP.
  2. Bernard, A., 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," Working papers 97-21, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Mary Amiti & Shang-Jin Wei, 2006. "Service Offshoring and Productivity: Evidence from the United States," NBER Working Papers 11926, National Bureau of Economic Research, Inc.
  4. Ekholm, Karolina & Hakkala, Katariina, 2006. "The Effect of Offshoring on Labour Demand: Evidence from Sweden," CEPR Discussion Papers 5648, C.E.P.R. Discussion Papers.
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  7. ITO Banri & TOMIURA Eiichi & WAKASUGI Ryuhei, 2007. "Dissecting Offshore Outsourcing and R&D: A Survey of Japanese Manufacturing Firms," Discussion papers 07060, Research Institute of Economy, Trade and Industry (RIETI).
  8. Rodolfo Helg & Lucia Tajoli, 2004. "Patterns of International Fragmentation of Production and Implications for the Labor Markets," International Trade 0405002, EconWPA.
  9. Holger Görg & Aoife Hanley & Eric Strobl, 2008. "Productivity effects of international outsourcing: evidence from plant-level data," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 670-688, May.
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  12. Eiichi Tomiura, 2005. "Foreign Outsourcing, Exporting, and FDI: A Productivity Comparison at the Firm Level," Discussion Paper Series 168, Research Institute for Economics & Business Administration, Kobe University.
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Citations

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Cited by:
  1. Lin, Songhua & Ma, Alyson C., 2012. "Outsourcing and productivity: Evidence from Korean data," Journal of Asian Economics, Elsevier, vol. 23(1), pages 39-49.
  2. KWON Hyeog Ug, 2012. "Offshoring of Japanese Small and Medium Enterprises (Japanese)," Discussion Papers (Japanese) 12004, Research Institute of Economy, Trade and Industry (RIETI).
  3. Magdolna Sass & Miklos Szanyi, 2012. "Two essays on Hungarian relocations," IEHAS Discussion Papers 1223, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  4. Joachim Wagner, 2009. "Offshoring and firm performance: Self-selection, effects on performance, or both?," Working Paper Series in Economics 153, University of Lüneburg, Institute of Economics.
  5. Martin Borowiecki & Bernhard Dachs & Doris Hanzl-Weiss & Steffen Kinkel & Johannes Pöschl & Magdolna Sass & Thomas Christian Schmall & Robert Stehrer & Andrea Szalavetz, 2012. "Global Value Chains and the EU Industry," wiiw Research Reports 383, The Vienna Institute for International Economic Studies, wiiw.

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