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The Effects of Offshoring to China: Reallocation, Employment and Productivity in Taiwan

Author

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  • Nigel Driffield
  • P.C. (Michelle) Chiang

Abstract

We examine the extent to which outward FDI from Taiwan to mainland China has contributed to the rising unemployment rate in Taiwan. Further, it examines whether outward FDI has contributed to productivity growth in Taiwan, and the importance of linkages between sectors in determining these effects. We provide strong evidence that Taiwanese firms have increased their investments in China, and that this has lead to a reduction in employment in such sectors at home. Further, we show that these effects are also translated up the supply chain, such that outward FDI also leads to a reduction in employment upstream in the supply chain.

Suggested Citation

  • Nigel Driffield & P.C. (Michelle) Chiang, 2009. "The Effects of Offshoring to China: Reallocation, Employment and Productivity in Taiwan," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 16(1), pages 19-38.
  • Handle: RePEc:taf:ijecbs:v:16:y:2009:i:1:p:19-38
    DOI: 10.1080/13571510802638916
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    Cited by:

    1. repec:eee:iburev:v:26:y:2017:i:5:p:839-854 is not listed on IDEAS
    2. repec:eee:chieco:v:44:y:2017:i:c:p:1-15 is not listed on IDEAS
    3. Dierk Herzer, 2010. "The Long-Run Relationship between Outward FDI and Total Factor Productivity: Evidence for Developing Countries," Ibero America Institute for Econ. Research (IAI) Discussion Papers 199, Ibero-America Institute for Economic Research.

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    Keywords

    FDI; Offshoring; Productivity;

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