Heterogeneous Globalization: Offshoring and Reorganization

Andrew Bernard, Teresa Fort, Valerie Smeets and Frédéric Warzynski

No 14485, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper exploits a unique offshoring survey to show that firms continue domestic production of the same goods they offshore to low-wage countries. This shift towards ``produced-good imports" coincides with a reallocation of labor from physical production to innovation and technology occupations, and an increase in domestically produced varieties' unit values. These responses suggest an additional, firm-level benefit of trade liberalization: the opportunity to offshore production of low-quality varieties, thereby freeing up resources for the development, production, and marketing of higher-quality varieties. Firms’ reactions also motivate a new offshoring measure – produced-good imports – that is readily observed in most firm-level datasets.

Keywords: Offshoring; Innovation; Import competition; Skilled workers; Technology; R&d (search for similar items in EconPapers)
JEL-codes: F14 F61 L25 (search for similar items in EconPapers)
Date: 2020-03
New Economics Papers: this item is included in nep-int and nep-tid
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Citations: View citations in EconPapers (30)

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Working Paper: Heterogeneous Globalization: Offshoring and Reorganization (2020)
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