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Effect of Offshoring on Exports of Firms in South Korea

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  • Minjung Kim

Abstract

This study empirically investigates the export-magnification effect of offshoring using a firm-level panel dataset from the manufacturing sector in South Korea. It estimates the impact of offshoring activities on export performance by examining intra-firm and arm’s length offshoring. The empirical evidence demonstrates the export-magnification effect of offshoring on both export market participation and export intensity. Particularly, the export-magnification effect of offshoring still exists among export entrants switching from non-exporters to exporters. Moreover, a greater export-magnification effect from intra-firm offshoring than from arm’s length offshoring is found using instrumental variable (IV) Tobit and probit models. This indicates that the vertical integration of production processes through intra-firm offshoring has a greater effect on export performance than international outsourcing to third parties.

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  • Minjung Kim, 2024. "Effect of Offshoring on Exports of Firms in South Korea," International Economic Journal, Taylor & Francis Journals, vol. 38(4), pages 689-700, October.
    • Handle: RePEc:taf:intecj:v:38:y:2024:i:4:p:689-700
    DOI: 10.1080/10168737.2024.2420650
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