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Productivity Gains from Offshoring: an Empirical Analysis for the Netherlands

Frank Den Butter () and Christiaan Pattipeilohy

No 07-089/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: A major question in the globalization debate is whether outsourcing and offshoring activities are beneficial to the home country. This paper investigates the effects on productivity and trade from the perspective of transaction costs, using a recent theory on trade in tasks. A production function is estimated for the Netherlands for the period 1972-2001. It suggests that the effect of offshoring manufacturing and services on total factor productivity (TFP) is positive and larger than the effect of R&D on productivity.

Keywords: globalization; offshoring; foreign direct investments; transaction costs; total factor productivity (search for similar items in EconPapers)
JEL-codes: F10 F43 O47 (search for similar items in EconPapers)
Date: 2007-11-23
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Citations: View citations in EconPapers (1)

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