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Future Bangalores? The increasing role of Central and Eastern Europe in the global services offshoring market: evidence from trade statistics

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  • Gál, Zoltán

Abstract

Many Central and Eastern European countries invigorated by EU enlargement became important locations for offshored service centres. Building on the region’s nearshoring advantages such as geographical-cultural proximity and on its multilingual graduate supply, CEE is likely to utilise more value added and quality-driven services. Trade statistics support the assumption that an expanding export in other business and ICT services has been associated with offshoring services in the six NMS analysed in detail in the paper. The service export data adopted from the Balance of Payments statistics gives a good approximation to indentify those sections of service trade, which can be regarded as offshorable. The paper summarises the additional factors favouring nearshoring (as in CEE locations) over offshoring (e.g. India) and lists several factors besides size why CEE countries cannot outpace India’s market potential.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 28360.

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Date of creation: 12 Apr 2010
Date of revision: 25 Oct 2010
Handle: RePEc:pra:mprapa:28360

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Keywords: offshoring; nearshoring; service trade; balance of payments statistics; offshorable services; Central and Eastern Europe; new member states; India; offshoring advantages;

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  1. Bevan, Alan A. & Estrin, Saul, 2004. "The determinants of foreign direct investment into European transition economies," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 775-787, December.
  2. Amiti, Mary & Wei, Shang-Jin, 2004. "Fear of Outsourcing: Is It Justified?," CEPR Discussion Papers 4719, C.E.P.R. Discussion Papers.
  3. 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.
  4. Eller, Markus & Haiss, Peter & Steiner, Katharina, 2006. "Foreign direct investment in the financial sector and economic growth in Central and Eastern Europe: The crucial role of the efficiency channel," Emerging Markets Review, Elsevier, vol. 7(4), pages 300-319, December.
  5. Gabor Hunya & Magdolna Sass, 2005. "Coming and Going: Gains and Losses from Relocations Affecting Hungary," wiiw Research Reports 323, The Vienna Institute for International Economic Studies, wiiw.
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