A specific-factors view on outsourcing

Köhler, Wilhelm

doi:10.1016/s1062-9408(00)00043-7

“…Where allocation of production among existing facilities is trade-theoretically straightforward, the decision to outsource creates new STRUCTURAL CHANGE AND THE LABOR-MARKET EFFECTS 771 technologies and transforms the dimensionality of the underlying model. 4 This recognition is increasingly being made in the theoretical literature on outsourcing (Jones and Kierzkowski, 2001;Deardorff, 2001;Kohler, 2001), but empirical work on the link between outsourcing and wages continues to use a mandated wage approach that manifestly does not permit such nonmarginal change (e.g., Feenstra and Hanson, 1999).…”

Section: Indirect Labor Market Effects Of Globalization: Some Prelimimentioning

confidence: 99%

Structural Change and the Labor‐market Effects of Globalization

Gaston¹,

Nelson

²

2004

Rev International Economics

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“…Trade theoretic models such as Deardorff (2001), Jones and Kierzkowski (2001) and Kohler (2001) examine the effects of trade in "fragmented products" on countries' patterns of specialisation and resulting implications for factor prices. On the empirical side recent papers by Hanson (1996, 1999) and Görg et al (2001) have analysed the effect of international outsourcing (or fragmentation) on relative wages and labour demand using industry level data for the US and UK respectively.…”

Section: Introductionmentioning

confidence: 99%

Outsourcing, Foreign Ownership, and Productivity: Evidence from UK Establishment‐level Data

Girma

¹

,

Görg

²

2004

Rev International Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AcknowledgementsThe authors are grateful to the ONS Business Data Linking Project for providing access to the ARD database. Thanks are also due to Eric Strobl and participants at the GEP conference on "Adjusting to Globalisation", in particular Steve Redding, for helpful comments and to Richard Upward for providing data from the New Earnings Survey. All remaining errors or omissions are, of course, the authors'. Financial support from the Leverhulme Trust (Grant No. F114/BF) is gratefully acknowledged. Outsourcing, foreign ownership and productivity:Evidence from UK establishment level data by Sourafel Girma and Holger Görg Abstract This paper presents an empirical analysis of "outsourcing" using establishment level data for UK manufacturing industries. We analyse an establishment's decision to outsource and the subsequent effects of outsourcing on the establishment's productivity. We compare outsourcing in domestic with foreign-owned establishments. Our empirical results suggest that high wages are positively related to outsourcing, suggesting that the cost saving motive is important. We also find that foreign-owned firms have higher levels of outsourcing than domestic establishments. In the productivity analysis we find that an establishment's outsourcing intensity is positively related to its labour productivity and total factor productivity growth and that this effect is more pronounced for foreign establishments. Outline

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“…Alternatively, employers can argue that productivity gains outweigh job losses especially in the lower skilled sectors and may be accompanied by increases in high skilled jobs. Kohler (2001) appropriately summarises the argument as "the perennial tension between efficiency and distributional concerns" (p. 49).…”

Section: Introductionmentioning

confidence: 99%

“…Heckscher-Ohlin or specific factors assumptions, is an investigation of how international outsourcing (fragmentation) is predicted to change the composition of skilled and unskilled labour in a country (Arndt, 1997;Deardorff, 2001;Egger and Egger, 2003;Jones and Kierzkowski, 2001;Kohler, 2001). In these models, international outsourcing mainly emerges in order to exploit differences in factor costs across countries.…”

Section: Introductionmentioning

confidence: 99%

Labour Demand Effects of International Outsourcing: Evidence from Plant Level Data

Görg

¹

,

Hanley

²

2005

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Acknowledgements This paper is forthcoming in a special issue of the International Review of Economics andFinance on "Outsourcing and Fragmentation: Blessing or Threat?". We are grateful to Forfás for the provision of the data. Financial support through the Leverhulme Trust (Grant No. F114/BF) is gratefully acknowledged. We would like to thank David Paton for helpful comments on an earlier version of the manuscript. All errors and omissions are our own. Labour demand effects of international outsourcing:Evidence from plant level data by Holger Görg and Aoife Hanley AbstractWe examine empirically the effect of international outsourcing on labour demand at the level of the individual plant. We do so by estimating a dynamic model of plant level labour demand, using a Generalised Method of Moments estimator. We use plant level data for the Irish Electronics sector, an industry that has expanded rapidly over the last decade and that has witnessed significant offshoring activity. Our results suggest that, in the short run, there are significant reductions in plant level labour demand, which we attribute to the use of international outsourcing. There appear to be stronger negative effects from outsourcing of materials than from services outsourcing. JEL classification: F14, J23, L23Keywords: international outsourcing, offshoring, labour demand, electronics industry Non-Technical SummaryThe term international outsourcing, or more specifically the location of production processes abroad and the subsequent imports of intermediates, has been a widely discussed topic in the US and European media recently. It appears to arouse either concern with unions that home jobs will be lost to workers abroad without commensurate job gains in other sectors, resulting in net job losses. Alternatively, employers can argue that productivity gains outweigh job losses especially in the lower skilled sectors and may be accompanied by increases in high skilled jobs. A recent Financial Times article reports findings from an independent consultant that a 'two-speed Europe is emerging', with the UK and Ireland reporting the highest levels of worker replacement. The article estimates, for example, that 100,000 UK jobs will have relocated abroad by 2005 as a direct consequence of international outsourcing. The corresponding estimates for Germany and France are 11,000 and 7,000 respectively. Accordingly, offshoring is a particularly burning issue in the island ec...

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A specific-factors view on outsourcing

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Cited by 85 publications

References 12 publications

Structural Change and the Labor‐market Effects of Globalization

Structural Change and the Labor‐market Effects of Globalization

Outsourcing, Foreign Ownership, and Productivity: Evidence from UK Establishment‐level Data

Labour Demand Effects of International Outsourcing: Evidence from Plant Level Data

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