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Input-Output Analysis of Deindustrialization and Outsourcing

Author

Listed:
  • Erika Stracová

    (University of Economics Bratislava)

  • Richard Kališ

Abstract

The paper deals with the topic of deindustrialization as a process of a decreasing relative importance of manufacturing. While the decrease of manufacturing in major developed and developed economies is undeniable, the developing and newly industrialized economies are starting to experience this phenomenon as well. The results of the paper show that the so-called premature deindustrialization is mainly caused by outsourcing. Furthermore, the data suggest the existence of an upper limit of outsourcing for major developed economies. In these economies, the decrease of manufacturing is more likely caused by other relevant factors. Last but not least, a few transition economies face to a slightly decreasing value of outsourcing on a much lower level. This could be explained by a fragmentation of the entire value chain across the European Union. The empirical results are based on the Input-Output methodology, the observation period of fifteen years from 2000 to 2014 and a sample of 43 countries.

Suggested Citation

  • Erika Stracová & Richard Kališ, 2017. "Input-Output Analysis of Deindustrialization and Outsourcing," Department of Economic Policy Working Paper Series 011, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.
    • Handle: RePEc:brt:depwps:011
    as

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    References listed on IDEAS

    as
    1. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    2. Mucha-Leszko, Bogumiła, 2016. "Causes and Consequences of Deindustrialization in the Euro Area," Problems of World Agriculture / Problemy Rolnictwa Światowego, Warsaw University of Life Sciences, vol. 16(31), pages 1-13, December.
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    4. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
    5. Sukti Dasgupta & Ajit Singh, 2006. "Manufacturing, Services and Premature Deindustrialization in Developing Countries: A Kaldorian Analysis," WIDER Working Paper Series RP2006-49, World Institute for Development Economic Research (UNU-WIDER).
    6. Sandro Montresor & Giuseppe Vittucci Marzetti, 2011. "The deindustrialisation/tertiarisation hypothesis reconsidered: a subsystem application to the OECD7," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(2), pages 401-421.
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    Keywords

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    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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