Does ICT Investment Spur or Hamper Offshoring? Empirical Evidence from Microdata

Luigi Benfratello, Tiziano Razzolini () and Alessandro Sembenelli ()
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Alessandro Sembenelli: University of Turin

No 9239, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We provide evidence on the effect of ICT investment on the propensity to offshore for a sample of Italian manufacturing firms. To deal with the endogeneity of ICT investment we adopt an innovative identification strategy based on the availability of local broad band facilities. Contrary to previous literature focusing on services, we find a negative effect of ICT on offshoring. Furthermore, when splitting the sample according to the technological level, the effect is negative and significant only in the sub-sample of low-tech firms. This suggests that ICT capital substitutes for foreign workers in performing routine tasks in low-tech industries.

Keywords: ICT Investment; offshoring; maximum likelihood system estimation (search for similar items in EconPapers)
JEL-codes: C34 C35 F20 L23 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2015-07
New Economics Papers: this item is included in nep-cse, nep-ict and nep-tid
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Does ICT Investment Spur or Hamper Offshoring? Empirical Evidence from Microdata (2009)
Working Paper: Does ICT Investment Spur or Hamper Offshoring? Empirical Evidence from Microdata (2009)
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