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Heterogeneous Globalization: Offshoring and Reorganization

Andrew B. 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 â?? produced-good imports â?? that is readily observed in most firm-level datasets.

Keywords: import competition; Innovation; offshoring; R&D; Skilled Workers; technology (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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