Offshoring, domestic outsourcing and productivity: evidence for a number of European countries

Schwörer, Tillmann

doi:10.1007/s10290-012-0139-9

Cited by 63 publications

(44 citation statements)

References 22 publications

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“…This definition of outsourcing measures follows the initial work by Feenstra and Hanson (1999) and recent work using WIOD by Schwörer (2012 Dummy for job loss is set to 1 in period t if person is unemployed in t (LFS$) and was working full time in t-1 (EMPLST$). For unemployed persons, no industry information is provided in period t. We replace the missing value in t by the values in t-1.…”

Section: A1: Calculation Of Offshoring Measures (Imported Intermediatmentioning

confidence: 99%

Offshoring, wages and job security of temporary workers

Görg

Görlich

2015

Rev World Econ

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Abstract:We investigate the impact of offshoring on individual level wages and unemployment probabilities and pay particular attention to the question of whether workers on temporary contracts are affected differently than workers on permanent contracts. Data are taken from the German Socio-Economic Panel (SOEP), linked with industry-level data on offshoring of materials and services inputs calculated from the World Input Output Database (WIOD). In manufacturing we find that temporary workers face a significant reduction in wages as materials offshoring increases, while permanent workers' wages are unaffected or even tend to increase. Offshoring of core activities generally also tends to reduce the probability of becoming unemployed, and more so for temporary than for permanent workers. By contrast, offshoring of services inputs does not have any statistically significant effects on either wages or employment probabilities in manufacturing. In the service industries, workers are affected in terms of employment probabilities from offshoring of services inputs only, although, in contrast to manufacturing industries, there are no statistically significant effects on individual wages from any type of offshoring.

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Section: A1: Calculation Of Offshoring Measures (Imported Intermediatmentioning

confidence: 99%

Offshoring, wages and job security of temporary workers

Görg

Görlich

2015

Rev World Econ

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“…In the specific case of Europe, which is our main interest, 8 it seems that despite a documented rise in offshoring practices (Baldone et al 2001;Marin 2006;Schwörer 2013), the link between this and a cross-border wage convergence mechanism has not been fully explored. In the past, studies of the EU15 economies (or subsamples of them) focused mainly on the effects of the common market, trade integration and the common currency on factor price equalization and did not reach a common conclusion in terms of wage/labour cost convergence (Tovias 1982;Andersen et al 2000;Mora et al 2005 -see the survey in Ramskogler 2010Ramskogler , 2012, who documents the state of wage convergence in the EMU and the role of Germany as a transnational wage leader).…”

Section: Introductionmentioning

confidence: 99%

Integrated sectors - diversified earnings: the (missing) impact of offshoring on wages and wage convergence in the EU27

Parteka

Wolszczak‐Derlacz

2015

J Econ Inequal

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This paper assesses the impact of international outsourcing/offshoring practices on the process of wage equalization across manufacturing sectors in a sample of EU27 economies (1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009). We discriminate between heterogeneous wage effects on different skill categories of workers (low, medium and high skill). The main focus is on the labour market outcomes of vertical integration, so we augment a model of conditional wage convergence through the inclusion of sector-specific broad and narrow outsourcing/offshoring indices based on input-output data (World Input Output Database, April 2012 release). Twoway relations between trade and wages are addressed through the use of a gravity-based sector-level instrument. We find no evidence supporting unconditional skill-specific wage convergence in EU sectors. In a conditional setting, (slow) wage convergence takes place, but international outsourcing plays a negligible role in wage equalization. Moreover, even though regression results indicate that offshoring reduces the wage growth of domestic medium-and low-skilled workers, we show that this negative effect is economically small.The research has been conducted within the project financed by the National Science Centre (NCN), Poland (decision number DEC-2013/11/B/HS4/02134). Financial support from NCN is gratefully acknowledged. We also thank two anonymous referees, David Card, as well as the participants to conferences (Max Weber Conference -European University Institute, Warsaw International Economic Meeting, DEGIT, Macromodels) and seminars (Labor Lunch Seminar -University of California, Berkeley; Universita' Politecnica delle Marche, Ancona; Warsaw School of Economics, Gdansk University of Technology) for useful remarks on an earlier version of this paper. The usual disclaimers apply.A. Parteka ( ) · J. Wolszczak-Derlacz

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“…As observed by Olsen (2006) and Schwörer (2013) direct investigations of the impact of outsourcing on firm performance are relatively small and provide some evidence that outsourcing can increase productivity, but the identified effects are quite heterogeneous depending on the analysed country, the firm's specific characteristics (exporters versus non-exporters, foreign-owned versus domestic) or the kind of activities outsourced (materials or services). Several studies (Girma & Görg, 2004;Hanley, 2004 and2011;Egger & Egger, 2006;Jabbour, 2010;Wagner, 2011;Schwörer, 2013) find some positive connection between productivity and outsourcing, though often this is limited to specific kind of firms or to the outsourcing of services, and to international outsourcing. However, other authors report no significant connection between outsourcing and a firm's performance (Gilley & Rasheed, 2000;Laugen et al, 2005) or any negative effect.…”

Section: )mentioning

confidence: 90%

“…For example, if a firm stops producing intermediate goods internally to buy them from an external supplier, both labour cost and capital investment will reduce (Görzig & Stephan, 2002). Additionally, through outsourcing, a firm may focus on its core skills and thus increase the level of innovation (Schwörer, 2013). On the other hand, another important aspect to consider in the decision in addition to the amount of asset specific investments, is the quality of intermediate goods produced by suppliers, which may indeed affects the quality of final products and, consequently, the firm's margins (Görzig & Stephan, 2002).…”

Section: Introductionmentioning

confidence: 99%

Outsourcing and Firm Performance: Evidence from the Italian Manufacturing Industry

Calia¹,

Pacei²

2017

IJBM

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This study presents an empirical analysis of the production outsourcing effect on firm productivity and profitability in the Italian manufacturing industry. This study uses firm-level panel data that were developed by the Italian National Statistical Institute. Using different estimation strategies, we develop panel data models and correct for possible endogeneity bias of the outsourcing with respect to the target variables. We find a non-significant effect of outsourcing on profitability and a significant negative effect of outsourcing on productivity.

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Offshoring, domestic outsourcing and productivity: evidence for a number of European countries

Cited by 63 publications

References 22 publications

Offshoring, wages and job security of temporary workers

Offshoring, wages and job security of temporary workers

Integrated sectors - diversified earnings: the (missing) impact of offshoring on wages and wage convergence in the EU27

Outsourcing and Firm Performance: Evidence from the Italian Manufacturing Industry

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