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International outsourcing and labour demand: Evidence from Finnish firm-level data

  • Böckerman, Petri
  • Riihimäki, Elisa

We examine the employment effects of international outsourcing by using firm-level data from the Finnish manufacturing sector. A major advantage of our data is that outsourcing is defined based on firms’ actual use of intermediate inputs from foreign trade statistics. The estimates show that intensive outsourcing (more than two times the 2-digit industry median) does not reduce employment nor have an effect on the share of low-skilled workers.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 16903.

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Date of creation: 21 Aug 2009
Date of revision:
Handle: RePEc:pra:mprapa:16903
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  1. Marin, Dalia, 2005. "A New International Division of Labor in Europe: Outsourcing and Offshoring to Eastern Europe," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 80, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  2. Wildasin, David E., 1999. "Factor mobility and fiscal policy in the EU: policy issues and analytical approaches," ZEW Discussion Papers 99-35, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Ekholm, Karolina & Hakkala, Katariina, 2005. "The Effect of Offshoring on Labor Demand: Evidence from Sweden," Working Paper Series 654, Research Institute of Industrial Economics.
  4. Burda, Michael C, 1999. "European Labour Markets and the Euro: How Much Flexibility Do We Really Need?," CEPR Discussion Papers 2217, C.E.P.R. Discussion Papers.
  5. Hartmut Egger & Peter Egger, 2000. "Outsourcing and skill-specific employment in a small economy: Austria and the fall of the Iron Curtain," Economics working papers 2000-24, Department of Economics, Johannes Kepler University Linz, Austria.
  6. Falk, Martin & Koebel, Bertrand M, 2002. " Outsourcing, Imports and Labour Demand," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 567-86, December.
  7. Caliendo, Marco & Kopeinig, Sabine, 2005. "Some Practical Guidance for the Implementation of Propensity Score Matching," IZA Discussion Papers 1588, Institute for the Study of Labor (IZA).
  8. Marianne Bertrand, 2004. "From the Invisible Handshake to the Invisible Hand? How Import Competition Changes the Employment Relationship," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 723-766, October.
  9. Alexander Hijzen & Holger Görg & Robert C. Hine, 2004. "International Outsourcing and the Skill Structure of Labour Demand in the United Kingdom," Discussion Papers of DIW Berlin 437, DIW Berlin, German Institute for Economic Research.
  10. Driffill, John & Meschi, Meloria & Ulph, Alistair Mitchell, 1998. "Product Market Integration and Wages: Evidence from a Cross-Section of Manufacturing Establishments in the United Kingdom," CEPR Discussion Papers 1818, C.E.P.R. Discussion Papers.
  11. Koskela, Erkki & Stenbacka, Rune, 2009. "Equilibrium unemployment with outsourcing under labour market imperfections," Labour Economics, Elsevier, vol. 16(3), pages 284-290, June.
  12. Maliranta, Mika & Rouvinen, Petri & Airaksinen, Aarno, 2008. "IT Outsourcing in Finnish Business," Discussion Papers 1140, The Research Institute of the Finnish Economy.
  13. Tito Boeri & Giuseppe Nicoletti & Stefano Scarpetta, . "Regulation and Labour Market Performance," Working Papers 158, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  14. Chiara Broccolini & Alessia Lo Turco & Andrea F. Presbitero & Stefano Staffolani, 2008. "Individual Earnings, International Outsourcing and Technological Change," Development Working Papers 242, Centro Studi Luca d\'Agliano, University of Milano.
  15. Egger, Peter & Pfaffermayr, Michael & Weber, Andrea, 2003. "Sectoral Adjustment of Employment: The Impact of Outsourcing and Trade at the Micro Level," IZA Discussion Papers 921, Institute for the Study of Labor (IZA).
  16. Becker Sascha O & Muendler Marc-Andreas, 2008. "The Effect of FDI on Job Security," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-46, April.
  17. Alexander Hijzen, 2007. "International Outsourcing, Technological Change, and Wage Inequality," Review of International Economics, Wiley Blackwell, vol. 15(1), pages 188-205, 02.
  18. Ingo Geishecker & Holger Görg, 2008. "Winners and losers: a micro-level analysis of international outsourcing and wages," Canadian Journal of Economics, Canadian Economics Association, vol. 41(1), pages 243-270, February.
  19. Ingo Geishecker, 2006. "Does Outsourcing to Central and Eastern Europe Really Threaten Manual Workers' Jobs in Germany?," The World Economy, Wiley Blackwell, vol. 29(5), pages 559-583, 05.
  20. repec:oup:qjecon:v:110:y:1995:i:4:p:1075-1110 is not listed on IDEAS
  21. Geishecker, Ingo, 2008. "The impact of international outsourcing on individual employment security: A micro-level analysis," Labour Economics, Elsevier, vol. 15(3), pages 291-314, June.
  22. repec:oup:qjecon:v:108:y:1993:i:4:p:983-1014 is not listed on IDEAS
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