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Can we really trust offshoring indices?

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  • Castellani, Davide
  • De Benedictis, Luca
  • Horgos, Daniel

Abstract

This paper argues that offshoring indices often measure something different than what we think they are. Using data from input-output tables of 21 European countries from 1995 to 2006 we decompose an offshoring index, distinguishing between a domestic (structural change) and an international component (imported inputs ratio). Regarding offshoring of business services, a large share of the index variation is driven by the domestic component. This is even more pronounced for overall service offshoring. In the case of material offshoring, by contrast, the international component drives the main variation of the indices. Our results therefore show that, regarding (business) services, the typical calculation of offshoring indices tends to over estimate the role of the imported inputs component, neglecting the role played by structural changes in the economy.

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  • Castellani, Davide & De Benedictis, Luca & Horgos, Daniel, 2013. "Can we really trust offshoring indices?," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 159-172.
    • Handle: RePEc:eee:streco:v:25:y:2013:i:c:p:159-172
    DOI: 10.1016/j.strueco.2012.10.001
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    2. Begoña Fuster & Carmen Martínez-Mora & Adelaida Lillo-Bañuls, 2023. "Does Reshoring Generate Employment? A Study on Services Reshoring and Its Intra- and Inter-Sectoral Components," SAGE Open, , vol. 13(3), pages 21582440231, September.
    3. Schwörer, Tillmann, 2012. "Offshoring, domestic outsourcing, and productivity: Evidence for a number of European countries," Kiel Working Papers 1786, Kiel Institute for the World Economy (IfW Kiel).
    4. Tillmann Schwörer, 2013. "Offshoring, domestic outsourcing and productivity: evidence for a number of European countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(1), pages 131-149, March.
    5. Fuster, Begoña & Lillo-Bañuls, Adelaida & Martínez-Mora, Carmen, 2020. "Reshoring of services and employment," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 233-246.
    6. Martin Borowiecki & Bernhard Dachs & Doris Hanzl-Weiss & Steffen Kinkel & Johannes Pöschl & Magdolna Sass & Thomas Christian Schmall & Robert Stehrer & Andrea Szalavetz, 2012. "Global Value Chains and the EU Industry," wiiw Research Reports 383, The Vienna Institute for International Economic Studies, wiiw.
    7. repec:gdk:wpaper:36 is not listed on IDEAS
    8. Daniel Horgos & Lucia Tajoli, 2015. "How Offshoring Can Affect the Industries’ Skill Composition," Economies, MDPI, vol. 3(2), pages 1-28, May.
    9. Andrea Coveri & Mario Pianta, 2019. "The Structural Dynamics of Income Distribution:Technology, Wages and Profits," Working Papers 1901, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2019.
    10. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2015. "Offshoring and skilled-unskilled wage gap in selected EU countries (1995–2009)," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 39, pages 151-166.
    11. Bramucci, Alessandro & Cirillo, Valeria & Evangelista, Rinaldo & Guarascio, Dario, 2021. "Offshoring, industry heterogeneity and employment11This paper is the research outcome of two projects: the ISIGrowth project on Innovation-fuelled, Sustainable, Inclusive Growth funded by the European," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 400-411.
    12. Joanna Wolszczak-Derlacz & Aleksandra Parteka, 2018. "The effects of offshoring to low-wage countries on domestic wages: a worldwide industrial analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(1), pages 129-163, February.

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    More about this item

    Keywords

    Offshoring; Structural change; Input–output indices;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F10 - International Economics - - Trade - - - General

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