Offshoring and specialisation: are industries moving?

Bournakis, Ioannis ORCID: https://orcid.org/0000-0002-7065-9316, Vecchi, Michela ORCID: https://orcid.org/0000-0002-0129-6769 and Venturini, Francesco (2011) Offshoring and specialisation: are industries moving? Working Paper. Royal Economic Society. .

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Abstract

This paper investigates the impact of off-shoring on specialisation via its effect on national endowments and productivity. We use different definition of off-shoring to properly capture international fragmentation of production, while controlling for countries‟ stocks of R&D and ICT capital. Using industry data for the US, Japan and Europe we show that while off-shoring of materials can benefit a wide range of industries, service and intra-industry off-shoring can decrease specialisation in high-tech industry, both within manufacturing and services. This effect can be compensated with increasing R&D investments.

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