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Outsourcing and Offshoring: Pushing the European Model Over the Hill, Rather Than Off the Cliff!

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  • Jacob Funk Kirkegaard

    () (Peterson Institute for International Economics)

Abstract

Offshoring and offshore outsourcing is increasingly affecting the EU-15, both in the manufacturing and services sectors. While no official statistics exist for the scope of the phenomenon, industry experts and press surveys point to a relatively limited extent of perhaps up to 2 percent of the workforce as affected. Offshoring and offshore outsourcing, similar to other trade, creates both domestic winners and losers. The EU-15 countries have the potential to become net beneficiaries from offshoring and offshore outsourcing, if they go ahead and implement the EU Lisbon Agenda with respect to labor market reforms and worker-skill upgrading. Furthermore, EU governments should take steps to promote the mobility of the workforce by increasingly linking social benefits to the willingness to move for work, thereby combating their archipelago of high unemployment enclaves, and to reform EU regional aid by shifting it from infrastructure spending to human capital investment.

Suggested Citation

  • Jacob Funk Kirkegaard, 2005. "Outsourcing and Offshoring: Pushing the European Model Over the Hill, Rather Than Off the Cliff!," Working Paper Series WP05-1, Peterson Institute for International Economics.
  • Handle: RePEc:iie:wpaper:wp05-1
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Agnes Ghibuţiu, 2009. "Romania’S Trade In Services: Reaping The Benefits Of Globalization," Romanian Economic Business Review, Romanian-American University, vol. 4(2), pages 13-32, June.
    2. Magdolna Sass & Gábor Hunya, 2014. "Escaping to the East? Relocation of business activities to and from Hungary, 2003–2011," IEHAS Discussion Papers 1407, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    3. Castellani, Davide & Pieri, Fabio, 2013. "R&D offshoring and the productivity growth of European regions," Research Policy, Elsevier, vol. 42(9), pages 1581-1594.
    4. Peter D. Ørberg Jensen & Jacob Funk Kirkegaard & Nicolai Søndergaard Laugesen, 2006. "Offshoring in Europe—Evidence of a Two-Way Street from Denmark," Working Paper Series WP06-3, Peterson Institute for International Economics.
    5. Metka Stare & Luis Rubalcaba, 2009. "International Outsourcing of Services: What Role for Central and East European Countries?," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 45(5), pages 31-46, September.
    6. Ghibutiu, Agnes & Poladian, Simona, 2009. "Global Sourcing Of Services: How Well Are The New Eu Member States Coping With The Challenges? (Part I)," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(1), pages 123-135, March.
    7. Elsie L. Echeverri-Carroll, 2013. "Offshore assembly and service industries in Latin America," Chapters,in: Handbook of Industry Studies and Economic Geography, chapter 17, pages 411-429 Edward Elgar Publishing.
    8. Ceci, Federica & Prencipe, Andrea, 2013. "Does Distance Hinder Coordination? Identifying and Bridging Boundaries of Offshored Work," Journal of International Management, Elsevier, vol. 19(4), pages 324-332.
    9. Berthold, Norbert & Neumann, Michael & Zenzen, Jupp, 2007. "Die Zukunft der Arbeit: Verdopplung, Entkopplung, regionale Divergenz?," Discussion Paper Series 96, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    10. Mukul G. Asher & Amarendu Nandy, 2006. "Demographic Complementarities and Outsourcing : Implications and Challenges for India," Macroeconomics Working Papers 22082, East Asian Bureau of Economic Research.
    11. Martin Borowiecki & Bernhard Dachs & Doris Hanzl-Weiss & Steffen Kinkel & Johannes Pöschl & Magdolna Sass & Thomas Christian Schmall & Robert Stehrer & Andrea Szalavetz, 2012. "Global Value Chains and the EU Industry," wiiw Research Reports 383, The Vienna Institute for International Economic Studies, wiiw.
    12. Jacob Funk Kirkegaard, 2007. "Offshoring, Outsourcing, and Production Relocation—Labor-Market Effects in the OECD Countries and Developing Asia," Working Paper Series WP07-2, Peterson Institute for International Economics.

    More about this item

    Keywords

    Offshoring; Outsourcing; Multinational Companies; European Union; Public Regulation; Labor Markets; Regional Aid;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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