Offshoring and the dynamics of employment, production, and imports: Evidence from the German International Sourcing Survey

Wolfhard Kaus and Markus Zimmermann

The World Economy, 2024, vol. 47, issue 9, 3747-3779

Abstract: This paper analyses the effect of offshoring on firm outcomes, using data from Germany's International Sourcing Survey (ISS) 2017 linked to other firm‐level data. We use a direct, survey‐based measure of offshoring on the extensive margin, namely whether a firm has relocated business functions abroad that were previously performed domestically within the firm. The analysis proceeds in two parts. First, difference‐in‐differences propensity score matching estimates reveal a negative effect of offshoring on domestic employment and production. However, most of this effect is not because the offshoring firms shrink, but because they do not grow as fast as the non‐offshoring firms. We further decompose the underlying employment dynamics using direct survey evidence on how many jobs the firms destroyed/created due to offshoring. Second, we analyse changes in the mix of import goods. Offshoring firms increase the share of ‘produced goods imports’, that is goods which are both imported and produced domestically by the firm. In contrast, offshoring firms do not increase the share of intermediate goods imports (a commonly used proxy for offshoring), as defined by the BEC Rev. 5 classification.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/twec.13606

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:47:y:2024:i:9:p:3747-3779

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0378-5920

Access Statistics for this article

The World Economy is currently edited by David Greenaway

More articles in The World Economy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().