In offshoring, a firm chooses outsourcing to independent suppliers or in-sourcing from their FDI subsidiaries. This paper empirically examines how the factor intensity is related with the firm's offshore make-or-buy decision based on the Japanese direct firm-level data of offshoring across all manufacturing industries. This paper confirms that in-sourcing firms tend to be substantially more capital-intensive than outsourcing firms, even if firm size or industry is controlled for. Among the firms offshoring to China compared with North, firms with wider range of capital-labor ratio choose to integrate but relatively capital-intensive firms are active in outsourcing.
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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number
08029.
Length: 23 pages Date of creation: Aug 2008 Date of revision: Handle: RePEc:eti:dpaper:08029
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Pol Antràs & Elhanan Helpman, 2003.
"Global Sourcing,"
NBER Working Papers
10082, National Bureau of Economic Research, Inc.
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