Offshoring has risen in all advanced economies in recent years. This column analyses the impact of offshoring trends in the UK, where offshoring in services has followed the abundant offshoring in manufacturing, by uncovering their spatial implications. The impact of offshoring in places more exposed to such trends has been significantly negative on routine occupations. On the other hand, when investment abroad targeted developing economies, the effect on job creation in non-routine occupations was positive.
Luisa Gagliardi, Simona Iammarino, Andrés Rodríguez-Pose, Thursday, November 5, 2015 - 00:00
Gianmarco I.P. Ottaviano, Giovanni Peri, Greg C. Wright, Wednesday, June 17, 2015 - 00:00
International trade in services and immigration are among the fastest growing aspects of globalisation. Using UK data, this column explores the links between these phenomena. Immigrants promote exports of final services to their home countries, while also reducing imports for some intermediate services, and bringing productivity gains to the labour market. In designing immigration policies, it is important that the potential impact on exports and offshoring activities are carefully considered.
Emily Blanchard, Xenia Matschke, Thursday, April 30, 2015 - 00:00
Recent decades have witnessed a dramatic shift in the nature of world trade brought about by the unbundling of international production. One implication is that lobbying by a nation’s firms can be partly influenced by a desired to protect their production facilities abroad. This column presents evidence that US imports from countries and industries with greater offshoring activity by US multinationals face distinctly lower trade barriers.
Daron Acemoglu, Gino Gancia, Fabrizio Zilibotti, Tuesday, September 30, 2014 - 00:00
Arik Levinson, Wednesday, September 24, 2014 - 00:00
Theodore H. Moran, Lindsay Oldenski, Saturday, August 9, 2014 - 00:00
There is indisputable evidence that manufacturing employment as a share of total employment in the US has been declining. This column argues that focusing on employment masks important signs of growth of the manufacturing sector. Using most up-to-date data, the authors reason that the US manufacturing base is growing larger, more productive and competitive. The expansion of operations abroad by US manufacturing multinationals leads to particularly strong increases in economic activity – including creation of greater numbers of high-paying manufacturing jobs – by those same firms in the US domestic economy.
Ursula Fritsch, Holger Görg, Monday, September 23, 2013 - 00:00
Outsourcing is a controversial practice. This column looks at its effects on firm-level innovation in emerging markets. The authors find robust evidence that outsourcing is positively related to various innovation measures. However, outsourcing only leads to increased R&D spending in countries where intellectual-property rights are well-protected.
Bernhard Dachs, Bernd Ebersberger, Steffen Kinkel, Oliver Som, Saturday, September 7, 2013 - 00:00
European offshoring mostly concerns factory jobs, but some worry that innovation will soon follow. This column shows that offshoring firms employ more people in R&D and design, introduce more frequently new products, and invest more frequently in advanced process technologies compared to non-offshoring firms. Concerns that offshoring may hurt innovation because of the lost links between production and product development are not supported by the evidence.
Antonio Accetturo, Anna Giunta, Salvatore Rossi, Saturday, December 15, 2012 - 00:00
Global value chains are increasingly viewed as the new paradigm in international production and trade. This column argues that a firm can perform better if it 'improves' its positioning in the world network by offshoring the production of its intermediates.
Lindsay Oldenski, Tuesday, October 16, 2012 - 00:00
The state of the US middle class has been a key issue this election season as middle-income workers have experienced relative wage losses in the last decade. Skill-biased technology change has previously been identified as a major cause of this polarisation of wages in the US. But this column shows that there is also an empirical link between offshoring by US firms and the polarisation of the US labour market.
Yasuyuki Todo, Sunday, July 15, 2012 - 00:00
Offshoring continues to be a controversial issue in many developed countries. This column provides evidence from Japan and argues that policymakers should not worry too much about the loss of jobs; while unskilled jobs are offshored, they are replaced with skilled jobs, leading to a more productive use of the domestic labour force.
Rachel Griffith, Helen Miller, Laura Abramovsky, Thursday, March 15, 2012 - 00:00
Multinational firms outsourcing or offshoring their operations to developing countries is a problem as old as globalisation. This column looks at the effect on high-skilled labour in the home country. It presents evidence that, on average, when firms start employing high-skilled workers offshore, they also increase the number of this type of worker employed at home.
Giordano Mion, Andrea Ariu, Saturday, February 25, 2012 - 00:00
Services trade has increased dramatically in the last 20 years. This column examines data from Belgium and suggests that the change in IT use does not translate into higher services exports. It argues instead that offshoring is a key factor contributing to the rise of services trade.
Holger Görg, Ingo Geishecker, Christiane Krieger-Boden, Saturday, December 24, 2011 - 00:00
The effects of offshoring on wages remain a hotly debated issue. This column explores the case of UK firms between 1992 and 2004, recognising that offshoring in one particular industry may also affect labour demand in other industries. It suggests that services and materials offshoring increase the wages of high-skilled workers and decreases the wages of low- and medium-skilled workers, thus contributing to a rising wage inequality.
Xiaole Wu, Fuqiang Zhang, Saturday, November 5, 2011 - 00:00
As the global economic downturn grinds on, more companies are acknowledging that labour costs aren’t always the most important factor when deciding where to build their next factory. This column argues that, in times of recession, some companies find that bringing their business home can give them a competitive edge.
Alyson C Ma, Ari Van Assche, Wednesday, May 18, 2011 - 00:00
Why do firms offshore manufacturing to China? This column uses data from China’s processing trade regime to argue that a hidden driver is the country’s geographic proximity to its East Asian neighbours.
Gianmarco I.P. Ottaviano, Giovanni Peri, Greg C. Wright, Thursday, November 18, 2010 - 00:00
Manufacturing production and employment in the US has been in decline over recent decades, often with the finger pointed at immigration and globalisation. This column presents evidence from the US between 2000 and 2007 to show that immigrant and native workers are more likely to compete against offshoring than against each other. Moreover, offshoring's productivity gains can spur greater demand for native workers.
Gianmarco I.P. Ottaviano, Giovanni Peri, Greg C. Wright, Tuesday, October 26, 2010 - 00:00
Do immigrants take American jobs? Or does increased efficiency in firms that hire immigrants or practice offshoring generate new jobs for US natives? The authors of CEPR Discussion Paper 8078 develop and test a model which measures both the direct impact of offshoring and hiring immigrants on the employment share of US natives and the indirect gains to US natives from the "cost-savings" effect.
Richard Baldwin, Friday, April 23, 2010 - 00:00
Offshoring is one of the most controversial outcomes of globalisation. This column asks whether economists need a new analytic framework to understand it. New research argues that all you need is good old-fashioned trade theory to keep your thinking straight.
Sascha O Becker, Karolina Ekholm, Marc Muendler, Monday, November 9, 2009 - 00:00
How do offshoring firms reshape their domestic workforce? This column, using evidence from German multinationals, shows a positive correlation between offshoring and the firm’s proportion of highly educated workers. Offshoring firms have relatively more domestic jobs involving non-routine and interactive tasks. But offshoring is far from the only explanation for the shift towards more educated employees carrying out more advanced tasks.