 The role of institutions and immigrant networks in firms’ offshoring decisionsSimone Moriconi, Giovanni Peri and Dario Pozzoli Post-Print from HAL Abstract: The offshoring of production by firms has expanded dramatically in recent decades, increasing their potential for economic growth. What determines the location of offshore production? How do countries' policies and characteristics affect a firm's decision about where to offshore? Do firms choose specific countries because of the countries' policies or because they know them better? In this paper, we use a rich dataset on Danish firms to analyze how decisions to offshore production depend on the institutional characteristics of the country and firm-specific bilateral networks. We find that institutions that reduce credit risk and corruption increase the probability that firms will offshore there, while those that increase regulation in the labour market decrease this probability. We also show that a firm's probability of offshoring increases with the share of its employees who are immigrants from that country of origin. Finally, our analysis reveals that the negative impact of institutions that hinder offshoring is attenuated by a strong bilateral network of foreign workers. Date: 2020-11 Published in Canadian Journal of Economics / Revue Canadienne d'Économique, 2020, 53 (4), pp.1745-1792. ⟨10.1111/caje.12470⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03269969 DOI: 10.1111/caje.12470 Access Statistics for this paper More papers in Post-Print from HAL |
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