Productivity gains and spillovers from offshoring
Offshoring is generally believed to be productivity-enhancing and this belief is underpinned by economic theory. This article contributes to the growing literature that tests empirically whether offshoring does indeed help to improve productivity. Estimating the impact of materials and business services offshoring on productivity growth with industry-level data for Belgium over the period 1995-2004, we examine this issue separately for manufacturing and market services. The results show that there is no productivity effect of materials offshoring, while business services offshoring leads to productivity gains in manufacturing. In addition, this is the first article to investigate the possibility of spillovers from offshoring. Productivity gains from offshoring in one industry may feed through to other industries that purchase its output for intermediate use if, due to offshoring, the user value exceeds the price of the output. There is only scarce evidence of positive spillovers from materials offshoring in manufacturing in the data, which suggests that most firms effectively manage to internalise all efficiency gains from offshoring.
|Date of creation:||09 Jun 2011|
|Date of revision:|
|Publication status:||Published by:|
|Contact details of provider:|| Web page: http://difusion.ulb.ac.be|
More information through EDIRC
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.:
- Rosario Crinò, 2008.
"Service offshoring and productivity in Western Europe,"
AccessEcon, vol. 6(35), pages 1-8.
- Rosario Crinò, 2008. "Service Offshoring and Productivity in Western Europe," KITeS Working Papers 220, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2008.
- Yasuyuki Todo & Weiying Zhang & Lei‐An Zhou, 2011. "Intra‐industry Knowledge Spillovers from Foreign Direct Investment in Research and Development: Evidence from China's “Silicon Valley”," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 569-585, 08.
- Egger, Peter & Pfaffermayr, Michael & Wolfmayr-Schnitzer, Yvonne, 2001. "The international fragmentation of Austrian manufacturing: The effects of outsourcing on productivity and wages," The North American Journal of Economics and Finance, Elsevier, vol. 12(3), pages 257-272, November.
- Feenstra, Robert C & Hanson, Gordon H, 1996.
"Globalization, Outsourcing, and Wage Inequality,"
American Economic Review,
American Economic Association, vol. 86(2), pages 240-45, May.
- Havranek, Tomas & Irsova, Zuzana, 2011. "Estimating vertical spillovers from FDI: Why results vary and what the true effect is," Journal of International Economics, Elsevier, vol. 85(2), pages 234-244.
- Calista Cheung & James Rossiter & Yi Zheng, 2008. "Offshoring and Its Effects on the Labour Market and Productivity: A Survey of Recent Literature," Bank of Canada Review, Bank of Canada, vol. 2008(Autumn), pages 17-30.
- ITO Keiko & TANAKA Kiyoyasu, 2010. "Does Material and Service Offshoring Improve Domestic Productivity? Evidence from Japanese manufacturing industries," Discussion papers 10010, Research Institute of Economy, Trade and Industry (RIETI).
When requesting a correction, please mention this item's handle: RePEc:dul:wpaper:2013/88571. 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: (Benoit Pauwels)
If references are entirely missing, you can add them using this form.