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Does domestic offshoring precede international offshoring? Industry-level evidence

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  • Bade, Franz-Josef
  • Bode, Eckhardt
  • Cutrini, Eleonora

Abstract

This paper presents descriptive evidence suggesting that there may be something to be learned about the future patterns of international offshoring from the recent patterns of 'domestic offshoring', the relocation of activities across regions within countries. Industries appear to offshore activities first within the same country and only later across the national border. Investigating the domestic and international offshoring patterns for West German manufacturing industries between 1992 and 2007, we find that, on the one hand, industries that offshored more extensively domestically offshored less extensively internationally, and vice versa. On the other hand, we find that those industries that offshored more extensively domestically were still in earlier stages of their life cycles while those that offshored more extensively internationally were already in later stages. International unbundling may consequently not be as unpredictable as it is currently believed to be.

Suggested Citation

  • Bade, Franz-Josef & Bode, Eckhardt & Cutrini, Eleonora, 2011. "Does domestic offshoring precede international offshoring? Industry-level evidence," Kiel Working Papers 1699, Kiel Institute for the World Economy (IfW).
    • Handle: RePEc:zbw:ifwkwp:1699
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    More about this item

    Keywords

    International offshoring; domestic offshoring; functional fragmentation; industry life cycle; Germany; K density;
    All these keywords.

    JEL classification:

    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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