Off-Shoring and Labor Productivity: Evidence from China

Hongbo Cai and Xiangjun Zhang
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Xiangjun Zhang: School of Mathematical Sciences, Beijing Normal University, Beijing 100875, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2011, vol. 6, issue 2, 271-289

Abstract: This paper uses input-output tables to measure material off-shoring, service off-shoring and narrow sense material off-shoring on 33 industries by use of DJ index (Daveri and Jona-Lasinio, 2008), not FH index with ¡°the same proportion assumption¡± (Feenstra and Hanson, 1996). It estimates the effects of the off-shoring on labor productivity by panel data model. Our results show that, the off-shoring is generally positively associated with labor productivity, and service off-shoring has more significant effect than the material off-shoring. There are some key aspects to be discussed in detail, including: (1) the heavy industry¡¯s material off-shoring increases obviously and service off-shoring declines in recent years, and the former¡¯s contribution to productivity growth is less than the latter; (2) the demand of chemical industry for service off-shoring significantly increases and its positive marginal effect on productivity growth is stronger than the material because of industry transformation and upgrading; and (3) the current intensive material off-shoring of textile, equipment manufacturing industries greatly contributes to productivity growth, while the positive effect from service off-shoring on labor productivity has initially boomed. In conclusion, we provide some suggestions for further development of China¡¯s off-shoring.

Keywords: off-shoring; material off-shoring; service off-shoring; labor; productivity; industrial sector (search for similar items in EconPapers)
JEL-codes: F02 F14 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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