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Global Sourcing Of Services: How Well Are The New Eu Member States Coping With The Challenges? (Part I)

  • Ghibutiu, Agnes

    ()

    (Institute for World Economy, Romanian Academy)

  • Poladian, Simona

    ()

    (Institute for World Economy, Romanian Academy)

Registered author(s):

    increasingly drawn the attention of economists and politicians, as well as the public. Particularly in the light of the recent waves of EU enlargement these countries have been considered as highly attractive locations for offshored services both from a European and global perspective. While a fairly large amount of anecdotal evidence documents the NMS high potentialities in terms of service offshoring, academic research on this topic is limited. This paper aims to contribute to this discussion. Drawing on recent literature on the complex issue of service globalisation, the paper investigates NMS trade and FDI flows in services over the period 1995-2007 to find evidence of enhanced offshoring-related activities in these countries. The focus is on NMS-10, i.e. NMS-12 excluding Cyprus and Malta. Given the shortcomings of available statistical data and instruments for gauging the scale and impact of services offshoring, the paper adopts a three-tier approach based on BoP trade and FDI statistics, complemented by alternative sources of information. Notwithstanding the caveats associated with this kind of empirical exercise, the paper documents an accelerated pace of offshoring-related activities in the selected NMS, under both forms: international outsourcing and captive offshoring. Its findings show that the fast growing exports in some individual service categories in recent years, coupled with the favourable ongoing changes in the structure and performance of NMS services trade are largely driven by enhanced offshoring activities hosted by their economies. Further, the paper highlights the NMS capabilities to cope with the challenges raised by the increasingly competitive global offshoring landscape, as measured by competitiveness indicators. Finally, the findings of the paper confirm that current anecdotal information and consulting companies-based projections on NMS growing attractiveness as targets of offshoring decisions by TNC originating both inside and outside EU-15 are widely backed up by available statistical data. The paper is organised in two parts under the same title.

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    Article provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.

    Volume (Year): 6 (2009)
    Issue (Month): 1 (March)
    Pages: 123-135

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    Handle: RePEc:rjr:romjef:v:6:y:2009:i:1:p:123-135
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    1. Karel Havik & Kieran Mc Morrow, 2006. "Global trade integration and outsourcing : How well is the EU coping with the new challenges?," European Economy - Economic Papers 259, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. 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.
    3. Dalia Marin, 2006. "A New International Division of Labor in Europe: Outsourcing and Offshoring to Eastern Europe," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 612-622, 04-05.
    4. Oecd, 2006. "Potential Impacts of International Sourcing on Different Occupation," OECD Digital Economy Papers 122, OECD Publishing.
    5. Oecd, 2006. "The Share of Employment Potentially Affected by Offshoring: An Empirical Investigation," OECD Digital Economy Papers 107, OECD Publishing.
    6. Jacob Funk Kirkegaard, 2005. "Outsourcing and Offshoring: Pushing the European Model Over the Hill, Rather Than Off the Cliff!," Working Paper Series WP05-1, Peterson Institute for International Economics.
    7. Mary Amiti & Shang-Jin Wei, 2005. "Fear of service outsourcing: is it justified?," Economic Policy, CEPR;CES;MSH, vol. 20(42), pages 308-347, 04.
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