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Firm Level Effects of Offshoring of Goods and Services on Relative Labor Demand

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Author Info

  • Andersson, Linda

    ()
    (Department of Business, Economics, Statistics and Informatics)

  • Karpaty, Patik

    ()
    (Department of Business, Economics, Statistics and Informatics)

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    Abstract

    Based on firm level data for the Swedish manufacturing sector the objective of this paper is to analyze relative labor demand effects due to offshoring. Data allow us to distinguish between goods and service offshoring and from which country Swedish firms source their inputs. Overall, our results give no support to the fears that offshoring of goods or services lead to out-location of high-skilled activity in Swedish firms. Rather, this paper finds robust evidence that the aggregate effects from offshoring lead to increasing relative demand of high-skilled labor, mainly due to service offshoring.

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    File URL: http://www.oru.se/PageFiles/63931/WP%202%202013.pdf
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    Bibliographic Info

    Paper provided by Örebro University, School of Business in its series Working Papers with number 2013:2.

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    Length: 34 pages
    Date of creation: 19 Oct 2012
    Date of revision:
    Handle: RePEc:hhs:oruesi:2013_002

    Note: This is an extensively revised version of working paper No. 2007:5
    Contact details of provider:
    Postal: Örebro University School of Business, SE - 701 82 ÖREBRO, Sweden
    Phone: 019-30 30 00
    Fax: 019-33 25 46
    Web page: http://www.oru.se/Institutioner/Handelshogskolan-vid-Orebro-universitet/
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    Related research

    Keywords: Offshoring; firm level data; relative employment; translog cost function;

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    References

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    1. Christopher Johann Kurz, 2006. "Outstanding Outsourcers: A Firm- and Plant-Level Analysis of Production Sharing," Working Papers 06-02, Center for Economic Studies, U.S. Census Bureau.
    2. Grossman, Gene & Helpman, Elhanan, 2002. "Outsourcing in a Global Economy," CEPR Discussion Papers 3165, C.E.P.R. Discussion Papers.
    3. Vanessa Strauss-Kahn, 2003. "The Role of Globalization in the Within-Industry Shift Away from Unskilled Workers in France," NBER Working Papers 9716, 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.
    5. Bob Anderton & Paul Brenton, 1998. "Outsourcing and Low-Skilled Workers in the UK," CSGR Working papers series 12/98, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
    6. Birkinshaw, Julian & Braunerhjelm, Pontus & Holm, Ulf & Terjesen, Siri, 2006. "Why Do Some Multinational Corporations Relocate Their Headquarters Overseas?," Working Paper Series in Economics and Institutions of Innovation 54, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    7. Senses, Mine Zeynep, 2010. "The effects of offshoring on the elasticity of labor demand," Journal of International Economics, Elsevier, vol. 81(1), pages 89-98, May.
    8. Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1215-1244, November.
    9. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment Updates and Implications," NBER Working Papers 7911, National Bureau of Economic Research, Inc.
    10. Arjan Lejour & Peter Smith, 2008. "International Trade in Services—Editorial Introduction," Journal of Industry, Competition and Trade, Springer, vol. 8(3), pages 169-180, December.
    11. Gene M. Grossman & Esteban Rossi-Hansberg, 2006. "Trading Tasks: A Simple Theory of Offshoring," NBER Working Papers 12721, National Bureau of Economic Research, Inc.
    12. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
    13. Christopher Johann Kurz, 2006. "Outstanding outsourcers: a firm- and plant-level analysis of production sharing," Finance and Economics Discussion Series 2006-04, Board of Governors of the Federal Reserve System (U.S.).
    14. Joakim Gullstrand, 2005. "Industry Dynamics in the Swedish Textile and Wearing Apparel Sector," Review of Industrial Organization, Springer, vol. 26(3), pages 349-370, December.
    15. Falk, Martin & Koebel, Bertrand M, 2002. " Outsourcing, Imports and Labour Demand," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 567-86, December.
    16. Hartmut Egger & Peter Egger, 2003. "Outsourcing and skill-specific employment in a small economy: Austria after the fall of the Iron Curtain," Oxford Economic Papers, Oxford University Press, vol. 55(4), pages 625-643, October.
    17. Pär Hansson, 2005. "Skill Upgrading and Production Transfer within Swedish Multinationals," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(4), pages 673-692, December.
    18. Roger Bandick & Pär Hansson, 2009. "Inward FDI and demand for skills in manufacturing firms in Sweden," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(1), pages 111-131, April.
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