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Does Offshoring of Materials and Business Services Affect Employment? Evidence from a Small Open Economy


  • Bernhard Michel
  • François Rycx


The fear of massive job losses has prompted a fast-growing literature on offshoring and its impact on employment in advanced economies. This paper examines the situation for Belgium. It improves the offshoring intensity measure by computing a volume measure of the share of imported intermediates in output and it is among the first to address both materials and business services offshoring to high-wage and low-wage countries. Estimations of static and dynamic industry-level labour demand equations augmented by offshoring intensities do not reveal a significant impact of either materials or business services offshoring on total employment for Belgium between 1995 and 2003.

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  • Bernhard Michel & François Rycx, 2009. "Does Offshoring of Materials and Business Services Affect Employment? Evidence from a Small Open Economy," DULBEA Working Papers 09-10.RS, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:dul:wpaper:09-10rs

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    References listed on IDEAS

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    Cited by:

    1. Lindic, Mojca, 2015. "Global value chains and the effects of outsourcing and offshoring on firms: Evidence from matched firm-employee data," MPRA Paper 67437, University Library of Munich, Germany.
    2. Fuster García, Begoña & Martínez Mora, Carmen, 2013. "Offshoring of Services in Spain: International Fragmentation of Activities or Change in Procurement Sources?/Offshoring de Servicios en España: ¿Fragmentación internacional de actividades o cambio en ," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 31, pages 655-676, Septiembr.
    3. Linda Andersson & Patrik Karpaty & Selen Savsin, 2016. "Firm-level effects of offshoring of materials and services on relative labor demand," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 321-350, May.
    4. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2015. "Integrated sectors - diversified earnings: the (missing) impact of offshoring on wages and wage convergence in the EU27," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(3), pages 325-350, September.
    5. Joanna Wolszczak-Derlacz & Aleksandra Parteka, 2016. "The Effects Of Offshoring To Low-Wage Countries On Domestic Wages – A Worldwide Industrial Analysis," GUT FME Working Paper Series A 36, Faculty of Management and Economics, Gdansk University of Technology.
    6. Bart Hertveldt & Bernhard Michel, 2013. "Offshoring and the Skill Structure of Labour Demand in Belgium," De Economist, Springer, vol. 161(4), pages 399-420, December.
    7. Andersson, Linda & Karpaty, Patik, 2012. "Firm Level Effects of Offshoring of Goods and Services on Relative Labor Demand," Working Papers 2013:2, Örebro University, School of Business.
    8. da Silveira, Giovani J.C., 2014. "An empirical analysis of manufacturing competitive factors and offshoring," International Journal of Production Economics, Elsevier, vol. 150(C), pages 163-173.
    9. Tobal Martín, 2015. "A Model of Wage and Employment Effects of Service Offshoring," Working Papers 2015-10, Banco de México.
    10. Dumont, Michel & Rayp, Glenn & Willemé, Peter, 2012. "The bargaining position of low-skilled and high-skilled workers in a globalising world," Labour Economics, Elsevier, vol. 19(3), pages 312-319.
    11. João Amador & Sónia Cabral, 2014. "Global Value Chains: Surveying Drivers, Measures and Impacts," Working Papers w201403, Banco de Portugal, Economics and Research Department.
    12. repec:kap:empiri:v:45:y:2018:i:1:d:10.1007_s10663-016-9352-4 is not listed on IDEAS

    More about this item


    Offshoring; imported intermediate inputs; supply and use tables; industry-level employment; labour demand equations; panel data.;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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