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Offshoring in the New Global Political Economy

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  • David L. Levy

Abstract

This essay challenges claims by economists and management scholars that 'offshoring' is simply another form of trade with mutual benefits. I argue that reducing wages through offshoring leads to wealth creation for shareholders but not necessarily for countries and employees, and that many displaced workers have difficulty 'trading up' to higher skilled jobs. Offshoring is a new phenomenon that entails the organizational and technological ability to relocate specific tasks and coordinate a geographically dispersed network of activities. It decouples the linkages between economic value creation and geographic location. The result is the creation of global commodity markets for particular skills and a shift in the balance of market power among firms, workers, and countries. Copyright Blackwell Publishing Ltd 2005.

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  • David L. Levy, 2005. "Offshoring in the New Global Political Economy," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 685-693, May.
  • Handle: RePEc:bla:jomstd:v:42:y:2005:i:3:p:685-693
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    1. Lori G. Kletzer, 2001. "Job Loss from Imports: Measuring the Costs," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 110.
    2. Diana Farrell, 2005. "Offshoring: Value Creation through Economic Change," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 675-683, May.
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