Immigrant Employment and the Contract Enforcement Costs of Offshoring

Andreas Hatzigeorgiou (), Patrik Karpaty, Richard Kneller and Magnus Lodefalk
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Andreas Hatzigeorgiou: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden, http://ratio.se/medarbetare/andreas-hatzigeorgiou/

No 282, Ratio Working Papers from The Ratio Institute

Abstract: Offshoring is an important aspect of firms’ internationalization. However, offshoring comes at a cost, especially where information or trust is lacking. Immigrant employees could reduce such offshoring costs through their knowledge of their former home countries and via access to foreign networks. We develop a framework of heterogeneous final-good firms to guide our empirical analysis and draw on new employer-employee data for approximately 12,000 Swedish firms during the time period 1998-2007. Our results support the hypothesis that immigrant employees spur offshoring activities by firms through lower offshoring costs. Hiring one additional foreign-born worker can increase offshoring up to three percent on average, with skilled migrants having the strongest effects.

Keywords: Offshoring; migration; networks; trust; information; trade barriers (search for similar items in EconPapers)
JEL-codes: D21 D83 F14 F22 F23 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016-12-21, Revised 2022-02-01
New Economics Papers: this item is included in nep-mig and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Immigrant employment and the contract enforcement costs of offshoring (2024)
Working Paper: Immigrant Employment and the Contract Enforcement Costs of Offshoring (2022)
Working Paper: Immigrant Employment and the Contract Enforcement Costs of Offshoring (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:ratioi:0282

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