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Off-Shoring and Labor Productivity: Evidence from China

Author

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  • Hongbo Cai

    (School of Economics and Business Administration, Beijing Normal University, Beijing 100875, China)

  • Xiangjun Zhang

    (School of Mathematical Sciences, Beijing Normal University, Beijing 100875, China)

Abstract

This paper uses input-output tables to measure material off-shoring, service off-shoring and narrow sense material off-shoring on 33 industries by use of DJ index (Daveri and Jona-Lasinio, 2008), not FH index with ¡°the same proportion assumption¡± (Feenstra and Hanson, 1996). It estimates the effects of the off-shoring on labor productivity by panel data model. Our results show that, the off-shoring is generally positively associated with labor productivity, and service off-shoring has more significant effect than the material off-shoring. There are some key aspects to be discussed in detail, including: (1) the heavy industry¡¯s material off-shoring increases obviously and service off-shoring declines in recent years, and the former¡¯s contribution to productivity growth is less than the latter; (2) the demand of chemical industry for service off-shoring significantly increases and its positive marginal effect on productivity growth is stronger than the material because of industry transformation and upgrading; and (3) the current intensive material off-shoring of textile, equipment manufacturing industries greatly contributes to productivity growth, while the positive effect from service off-shoring on labor productivity has initially boomed. In conclusion, we provide some suggestions for further development of China¡¯s off-shoring.

Suggested Citation

  • Hongbo Cai & Xiangjun Zhang, 2011. "Off-Shoring and Labor Productivity: Evidence from China," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 6(2), pages 271-289, June.
    • Handle: RePEc:fec:journl:v:6:y:2011:i:2:p:271-289
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    File URL: http://journal.hep.com.cn/fec/EN/10.1007/s11459-011-0132-6
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    References listed on IDEAS

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    1. Hongbo CAI & Hao CHEN & Xinhe LIU, 2012. "Offshoring And Employment Structure: Evidence From China," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 7(1(19)/ Sp), pages 35-47.

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    More about this item

    Keywords

    off-shoring; material off-shoring; service off-shoring; labor; productivity; industrial sector;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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