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Offshoring And Productivity: A Micro‐Data Analysis

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  • Jianmin Tang
  • Henrique Do Livramento

Abstract

Offshoring has become increasingly important for businesses, especially manufacturing firms, to compete in domestic and international markets. This paper empirically studies the association between offshoring, productivity, and plant characteristics by focusing on the geographical dimension of plants' business activities. Using data from Statistics Canada's Survey of Innovation 2005 and Annual Surveys of Manufacturers, we show that material offshoring is strongly associated with firms' outward‐oriented business activities (including foreign operation, investing in foreign M&E, and exporting), even after controlling for geographic advantages and industry‐ and plant‐specific effects. For R&D offshoring, we find that it is mainly associated with investment in foreign M&E. In addition, this paper shows that material offshoring is positively associated with productivity and that the association is significantly larger for material offshoring to Asia Pacific countries than for material offshoring to the U.S. and other locations.

Suggested Citation

  • Jianmin Tang & Henrique Do Livramento, 2010. "Offshoring And Productivity: A Micro‐Data Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages 111-134, June.
    • Handle: RePEc:bla:revinw:v:56:y:2010:i:s1:p:s111-s134
    DOI: 10.1111/j.1475-4991.2010.00392.x
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    Cited by:

    1. Jianmin Tang & Weimin Wang, 2015. "Economic Growth in Canada and the United States: Supply-Push or Demand-Pull?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(4), pages 773-798, December.
    2. Baier , Elisabeth & Rammer , Christian & Schubert , Torben, 2013. "The Impact of Innovation Off-shoring on Organizational Adaptability," Papers in Innovation Studies 2013/44, Lund University, CIRCLE - Centre for Innovation Research.
    3. Nieto, María Jesús & Rodríguez, Alicia & Hernández, Virginia, 2022. "International sourcing and the productivity of SMEs in transition countries: Formal and informal ‘region effects’ and the communist footprint," Journal of Business Research, Elsevier, vol. 145(C), pages 347-359.
    4. Michael-John Almon & Jianmin Tang, 2011. "Industrial Structural Change and the Post-2000 Output and Productivity Growth Slowdown: A Canada-U.S. Comparison," International Productivity Monitor, Centre for the Study of Living Standards, vol. 22, pages 44-81, Fall.
    5. Alicia Rodríguez & María Jesús Nieto, 2016. "Does R&D offshoring lead to SME growth? Different governance modes and the mediating role of innovation," Strategic Management Journal, Wiley Blackwell, vol. 37(8), pages 1734-1753, August.
    6. Baier, Elisabeth & Rammer, Christian & Schubert, Torben, 2015. "The Impact of Captive Innovation Offshoring on the Effectiveness of Organizational Adaptation," Journal of International Management, Elsevier, vol. 21(2), pages 150-165.
    7. Robert J. Hill & Alice O. Nakamura, 2010. "Improving Inflation And Related Performance Measures For Nations: An Introduction," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages 1-10, June.
    8. Schubert, Torben, 2021. "Internationalization, Product Innovation and the moderating Role of National Diversity in the Employment Base," Papers in Innovation Studies 2021/3, Lund University, CIRCLE - Centre for Innovation Research.

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