Gains from Offshoring? Evidence from U.S. Microdata

Ryan Monarch, Jooyoun Park and Jagadeesh Sivadasan

No 635, Working Papers from Research Seminar in International Economics, University of Michigan

Abstract: We construct a new linked data set with over one thousand offshoring events by matching Trade Adjustment Assistance program petition data to micro-data from the U.S. Census Bureau. We exploit this data to assess how offshoring impacts domestic firm-level aggregate employment, output, wages and productivity. A class of models predicts that more productive firms engage in offshoring, and that this leads to gains in output and (measured) productivity, and potential gains in employment and wages, in the remaining domestic activities of the offshoring firm. Consistent with these models, we find that offshoring firms are on average larger and more productive compared to non-offshorers. However, we find that offshorers suffer from a large decline in employment (32 per cent) and output (28 per cent) relative to their peers even in the long run. Further, we find no signi cant change in average wages or in total factor productivity measures at affected firms. We find these results robust to a variety of checks. Thus we find no evidence for positive spillovers to the remaining domestic activity of firms in this large sample of offshoring events.

Keywords: Outsourcing; employment; trade; productivity; firm performance (search for similar items in EconPapers)
JEL-codes: F14 F16 F23 F61 F66 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2013-01-21
New Economics Papers: this item is included in nep-bec and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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http://www.fordschool.umich.edu/rsie/workingpapers/Papers626-650/r635.pdf

Related works:
Journal Article: Domestic gains from offshoring? Evidence from TAA-linked U.S. microdata (2017)
Working Paper: Gains from Offshoring? Evidence from U.S. Microdata (2014)
Working Paper: Gains from Offshoring? Evidence from U.S. Microdata (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:mie:wpaper:635

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