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Foreign outsourcing and firm-level characteristics: evidence from Japanese manufacturers

  • Eiichi Tomiura

Based on micro data of 118,300 firms without firm-size thresholds covering all manufacturing industries in Japan, this paper investigates the foreign outsourcing, distinguished explicitly from domestic outsourcing, at the firm level. Less than three percent of the firms are outsourcing their production across national borders. The fixed entry cost for foreign outsourcing is significant and related with the firm's human skills and foreign business experience. The firms tend to outsource more of their activities overseas when their productivity is higher or when their products are more labor-intensive.

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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Hi-Stat Discussion Paper Series with number d04-64.

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Date of creation: Dec 2004
Date of revision:
Handle: RePEc:hst:hstdps:d04-64
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  1. Paul, Catherine J Morrison & Siegel, Donald S, 2001. " The Impacts of Technology, Trade and Outsourcing on Employment and Labor Composition," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(2), pages 241-64, June.
  2. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2002. "Vertical Integration and Distance to Frontier," NBER Working Papers 9191, National Bureau of Economic Research, Inc.
  3. Grossman, Gene M. & Helpman, Elhanan, 2004. "Managerial incentives and the international organization of production," Journal of International Economics, Elsevier, vol. 63(2), pages 237-262, July.
  4. Antras, Pol, 2003. "Firms, Contracts, and Trade Structure," Scholarly Articles 3196328, Harvard University Department of Economics.
  5. Swenson, Deborah L, 2000. "Firm Outsourcing Decisions: Evidence from U.S. Foreign Trade Zones," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 175-89, April.
  6. Bernd Görzig & Andreas Stephan, 2002. "Outsourcing and Firm-level Performance," Discussion Papers of DIW Berlin 309, DIW Berlin, German Institute for Economic Research.
  7. Deborah Swenson & Robert Feenstra & Gordon H. Hanson, 2003. "Offshore Assembly From The United States: Production Characteristics Of The 9802 Program," Working Papers 9810, University of California, Davis, Department of Economics.
  8. Pol Antràs & Elhanan Helpman, 2003. "Global Sourcing," NBER Working Papers 10082, National Bureau of Economic Research, Inc.
  9. Egger, Hartmut & Egger, Peter, 2001. "Cross-border sourcing and outward processing in EU manufacturing," The North American Journal of Economics and Finance, Elsevier, vol. 12(3), pages 243-256, November.
  10. Holger Görg, 2000. "Fragmentation and trade: US inward processing trade in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(3), pages 403-422, 09.
  11. Anderton, Bob & Brenton, Paul, 1999. "Outsourcing and Low-Skilled Workers in the UK," Bulletin of Economic Research, Wiley Blackwell, vol. 51(4), pages 267-85, October.
  12. Haskel, Jonathan, 1996. "Small Firms, Contracting-out, Computers and Wage Inequality: Evidence from UK Manufacturing," CEPR Discussion Papers 1490, C.E.P.R. Discussion Papers.
  13. Jose Campa & Linda S. Goldberg, 1997. "The Evolving External Orientation of Manufacturing Industries: Evidence from Four Countries," NBER Working Papers 5919, National Bureau of Economic Research, Inc.
  14. David Hummels & Jun Ishii & Kei-Mu Yi, 1999. "The nature and growth of vertical specialization in world trade," Staff Reports 72, Federal Reserve Bank of New York.
  15. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 394-424, July.
  16. Head, Keith & Ries, John, 2002. "Offshore production and skill upgrading by Japanese manufacturing firms," Journal of International Economics, Elsevier, vol. 58(1), pages 81-105, October.
  17. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc.
  18. Glass, Amy Jocelyn & Saggi, Kamal, 2001. "Innovation and wage effects of international outsourcing," European Economic Review, Elsevier, vol. 45(1), pages 67-86, January.
  19. repec:hrv:faseco:4784029 is not listed on IDEAS
  20. Ingo Geishecker, 2002. "Outsourcing and the Demand for Low-skilled Labour in German Manufacturing: New Evidence," Discussion Papers of DIW Berlin 313, DIW Berlin, German Institute for Economic Research.
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