Export Outsourcing and Foreign Direct Investment: Evidence from Taiwanese Exporting Firms
Exporting and FDI have traditionally been two major firm-level responses to globalization. Export outsourcing (EO), a new strategy that gained in importance recently, has now become another alternative. This paper seeks to examine how firms choose between EO and outward FDI by looking into firm-level productivity differences. A special data set is constructed by consolidating two micro data sets of Taiwanese manufacturing firms. The paper contributes in four main ways. First, it provides a causality analysis of labor productivity and EO, whereas previous studies deal only with correlations. Second, it shows that EO can be interpreted as an indirect way of exporting. Third, it points out that outward FDI itself may not help with productivity if it is not linked with EO, which finding contradicts conventional wisdom. Finally, most evidences seem to imply that the intricate Taiwan-China interconnection is a significant factor that facilitates or contributes to all above-mentioned findings.
|Length:||24 pages JEL Classification: F14, F23, L22, L23, D21|
|Date of creation:||Jun 2005|
|Date of revision:|
|Contact details of provider:|| Postal: Niels Bohrs Vej 9, 6700 Esbjerg|
Phone: +45 6550 2233
Fax: +45 6550 1090
Web page: http://degit.sam.sdu.dk/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
- Eiichi Tomiura, 2005.
"Foreign Outsourcing, Exporting, and FDI: A Productivity Comparison at the Firm Level,"
Discussion Paper Series
168, Research Institute for Economics & Business Administration, Kobe University.
- Tomiura, Eiichi, 2007. "Foreign outsourcing, exporting, and FDI: A productivity comparison at the firm level," Journal of International Economics, Elsevier, vol. 72(1), pages 113-127, May.
- Chen, Tain-Jy, 1992. "Determinants of Taiwan's direct foreign investment : The case of a newly industrializing country," Journal of Development Economics, Elsevier, vol. 39(2), pages 397-407, October.
- Antràs, Pol & Helpman, Elhanan, 2004.
CEPR Discussion Papers
4170, C.E.P.R. Discussion Papers.
- Antras, Pol & Helpman, Elhanan, 2004. "Global Sourcing," Scholarly Articles 3196327, Harvard University Department of Economics.
- Pol Antras & Elhanan Helpman, 2003. "Global Sourcing," Harvard Institute of Economic Research Working Papers 2005, Harvard - Institute of Economic Research.
- Pol Antràs & Elhanan Helpman, 2003. "Global Sourcing," NBER Working Papers 10082, National Bureau of Economic Research, Inc.
- Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004.
"Export Versus FDI with Heterogeneous Firms,"
American Economic Review,
American Economic Association, vol. 94(1), pages 300-316, March.
- Aw, B. -Y. & Hwang, A. R., 1995. "Productivity and the export market: A firm-level analysis," Journal of Development Economics, Elsevier, vol. 47(2), pages 313-332, August.
- Amy R. Hwang, 2003. "Exports, Returns to Scale, and Total Factor Productivity: The Case of Taiwanese Manufacturing Industries," Review of Development Economics, Wiley Blackwell, vol. 7(2), pages 204-216, 05.
- David Greenaway, 2004. "The Assessment: Firm-level Adjustment to Globalization," Oxford Review of Economic Policy, Oxford University Press, vol. 20(3), pages 335-342, Autumn.
- David L. Hummels & Jun Ishii & Kei-Mu Yi, 1999.
"The nature and growth of vertical specialization in world trade,"
72, Federal Reserve Bank of New York.
- Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
- Brainard, S Lael, 1997. "An Empirical Assessment of the Proximity-Concentration Trade-off between Multinational Sales and Trade," American Economic Review, American Economic Association, vol. 87(4), pages 520-44, September.
- Keith Head & John Ries, 2004. "Exporting and FDI as Alternative Strategies," Oxford Review of Economic Policy, Oxford University Press, vol. 20(3), pages 409-423, Autumn.
- David Greenaway & Richard Kneller, 2004. "Exporting and Productivity in the United Kingdom," Oxford Review of Economic Policy, Oxford University Press, vol. 20(3), pages 358-371, Autumn.
- Sourafel Girma & Holger Görg, 2004.
"Outsourcing, Foreign Ownership, and Productivity: Evidence from UK Establishment-level Data,"
Review of International Economics,
Wiley Blackwell, vol. 12(5), pages 817-832, November.
- Sourafel Girma & Holger Görg, 2003. "Outsourcing, Foreign Ownership and Productivity: Evidence from UK Establishment Level Data," Discussion Papers of DIW Berlin 361, DIW Berlin, German Institute for Economic Research.
- Fixler, Dennis J. & Siegel, Donald, 1999. "Outsourcing and productivity growth in services," Structural Change and Economic Dynamics, Elsevier, vol. 10(2), pages 177-194, June.
- repec:hrv:faseco:4784029 is not listed on IDEAS
- Sourafel Girma & Holger Görg & Eric Strobl, 2003.
"Exports, International Investment, and Plant Performance: Evidence from a Non-Parametric Test,"
Discussion Papers of DIW Berlin
379, DIW Berlin, German Institute for Economic Research.
- Girma, Sourafel & Gorg, Holger & Strobl, Eric, 2004. "Exports, international investment, and plant performance: evidence from a non-parametric test," Economics Letters, Elsevier, vol. 83(3), pages 317-324, June.
- GIRMA, Sourafel & GOERG, Holger & STROBL, Eric, 2004. "Exports, international investment, and plant performance : evidence from a non-parametric test," CORE Discussion Papers 2004009, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
When requesting a correction, please mention this item's handle: RePEc:deg:conpap:c010_047. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Pedersen)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.