The Role of Cross-Border Networks of Skilled Labor in Offshore Outsourcing: Empirical Evidence Based on the Network Theory

Akihiko Shinozaki () and Shigehiro Kubota ()
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Akihiko Shinozaki: Kyushu University
Shigehiro Kubota: Tohoku Bunka Gakuen University

The Review of Socionetwork Strategies, 2018, vol. 12, issue 2, 153-165

Abstract: Abstract This study investigates the determinant role of the cross-border movement of skilled labor in the expansion of service trade between the US, and both developed and developing countries. For this purpose, we employ the key concepts of network theory as an analytical framework and conduct panel data analysis and graphical modeling analysis for 31 countries from 1999 to 2008. In this decade, offshore outsourcing in the service trade took off worldwide. We use data for each country’s service exports to the US, number of H-1B visas issued, GNI per-capita, network readiness index, and an English dummy for the official language. We illustrate the trajectory and interactions between these factors. These analyses yield three observations. First, service trade with the US is more intensive among higher income countries. Second, the number of H-1B visas issued has a positive effect on service exports to the US. Third, individuals in lower income countries tend to desire H-1B visas and create intensive skilled labor networks with the US, the path through which developing countries such as India expanded their service exports to the US.

Keywords: Offshoring; Trade in services; Graphical modeling; Human resource network; F14 Multilateral Trade and Developing Countries; F01 Globalization; F20 International Factor Movements; O10 Economic Development (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s12626-018-0028-3

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