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Productivity Gains from Offshoring: an Empirical Analysis for the Netherlands

Author

Listed:
  • Frank A.G. den Butter

    (VU University Amsterdam)

  • Christiaan Pattipeilohy

    (VU University Amsterdam, and Frisch Center, Oslo)

Abstract

A major question in the globalization debate is whether outsourcing and offshoring activities are beneficial to the home country. This paper investigates the effects on productivity and trade from the perspective of transaction costs, using a recent theory on trade in tasks. A production function is estimated for the Netherlands for the period 1972-2001. It suggests that the effect of offshoring manufacturing and services on total factor productivity (TFP) is positive and larger than the effect of R&D on productivity.

Suggested Citation

  • Frank A.G. den Butter & Christiaan Pattipeilohy, 2007. "Productivity Gains from Offshoring: an Empirical Analysis for the Netherlands," Tinbergen Institute Discussion Papers 07-089/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20070089
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    References listed on IDEAS

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    Cited by:

    1. Frank A.G. den Butter, 2012. "Managing Transaction Costs in the Era of Globalization," Books, Edward Elgar Publishing, number 14748.

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    More about this item

    Keywords

    globalization; offshoring; foreign direct investments; transaction costs; total factor productivity;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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