Regional Amenities, Services Offshoring, and Skilled Employment in the Republic of Korea

Ju Hyun Pyun
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Ju Hyun Pyun: Korea University Business School

No DP-2024-01, Working Papers from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: This study empirically examines the effect of services offshoring and regional amenities on the composition of skilled employment for services firms. Analysing Korean firm-level data spanning from 2006 to 2019, we find that services offshoring, characterised by the import of services intermediate inputs, correlates with an increase in the proportion of skilled workers within firms. Additionally, the effects of this shift are nuanced based on different skill levels: services offshoring leads to an increase in the share of permanent headquarters workers to total workers. However, it does not affect the share of high-end skilled workers, such as headquarters’ share of management and research and development (R&D) workers. Moreover, regional amenities promote the positive effect of services offshoring on permanent headquarters workers’ shares. Lastly, the positive effect of offshoring on demand for highend skilled workers in headquarters is significantly greater for firms with higher R&D intensity.

Keywords: Services firms; Entry; Productivity; Korean firm-level data; Regional amenities; Industry heterogeneity (search for similar items in EconPapers)
JEL-codes: F10 F14 L80 (search for similar items in EconPapers)
Date: 2024-05-07
New Economics Papers: this item is included in nep-bec, nep-int and nep-sbm
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