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Offshoring and firm overlap

Author

Listed:
  • Capuano, Stella

    (IAB)

  • Egger, Hartmut

    (CESifo ; GEP ; IfW ; University of Bayreuth)

  • Koch, Michael

    (University of Bayreuth ; University of Hagen)

  • Schmerer, Hans-Jörg

    (Institute for Employment Research (IAB), Nuremberg, Germany ; CESifo ; University of Hagen)

Abstract

"We set up a model of offshoring with heterogeneous producers that captures two empirical regularities of German offshoring firms. There is selection of larger, more productive firms into offshoring. However, the selection is not sharp, and offshoring and non-offshoring firms coexist over a wide range of the revenue distribution. An overlap of offshoring and nonoffshoring firms emerges in our model because, in contrast to textbook models of trade with heterogeneous producers, we allow firms to differ in two technology parameters thereby decoupling the offshoring status of a firm from its revenues. In an empirical analysis, we employ firm-level data from Germany to estimate key parameters of the model and show that ignoring the overlap lowers the estimated gains from offshoring by more than 50 percent and, at the same time, exaggerates substantially the importance of the extensive margin for explaining the evolution of German offshoring over the last 25 years." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Capuano, Stella & Egger, Hartmut & Koch, Michael & Schmerer, Hans-Jörg, 2017. "Offshoring and firm overlap," IAB-Discussion Paper 201706, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  • Handle: RePEc:iab:iabdpa:201706
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    Cited by:

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    2. Capuano, Stella & Hauptmann, Andreas & Schmerer, Hans-Jörg, 2020. "Trade and unions: Does size matter?," Economic Modelling, Elsevier, vol. 84(C), pages 66-75.

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    More about this item

    Keywords

    Bundesrepublik Deutschland ; Ausland ; Außenhandelstheorie ; Betriebsverlagerung ; Determinanten ; Entwicklung ; Gewinn ; IAB-Betriebspanel ; IAB-Linked-Employer-Employee-Datensatz ; BIBB/BAuA-Erhebung ; Niedriglohnland ; outsourcing ; Produktionsverlagerung ; Tätigkeitsmerkmale ; Unternehmensgröße ; Arbeitsplatzverlagerung ; Arbeitsproduktivität ; 1990-2014;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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