Cross-regional Variations in Offshore Outsourcing Choices: Evidence from Firm-level Data

Eiichi Tomiura, Banri Ito and Ryuhei Wakasugi ()

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: In offshoring, a firm chooses outsourcing to independent suppliers or in-sourcing from their FDI subsidiaries. This paper empirically examines how the factor intensity is related with the firm's offshore make-or-buy decision based on the Japanese direct firm-level data of offshoring across all manufacturing industries. This paper confirms that in-sourcing firms tend to be substantially more capital-intensive than outsourcing firms, even if firm size or industry is controlled for. Among the firms offshoring to China compared with North, firms with wider range of capital-labor ratio choose to integrate but relatively capital-intensive firms are active in outsourcing.

Pages: 23 pages
Date: 2008-08
New Economics Papers: this item is included in nep-bec
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:08029

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