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Analysis of the offshoring network: Empirical evidence of the implied comparative advantage in offshoring

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  • Mery Patricia Tamayo Plata
  • Cristian Camilo Chica Castaño
  • Gustavo Javier Canavire-Bacarreza

Abstract

Using a measure of the volume of offshoring conducted by 62 countries, the intrinsic properties of the global offshoring network are analyzed: size, density, and others. From these properties, we extract information about which countries and sectors of the economy are the main drivers of the network. We find a regularity through the network of all sectors, which we call a stylized fact, that yields an insight into the uniform trade integration of countries through time. Additionally, we construct the measure of implied comparative advantage (ICA) – proposed by Hausmann et al. (2019. Implied comparative advantage) – and empirically verify, for the offshoring conducted by these 62 countries, the hypothesis of a systematic correlation between pairs of industries across different countries. Finally, since the ICA measure is a predictor of the revealed comparative advantage for the offshoring, we verify that the ICA measure preserves the basic properties of the original offshoring network.

Suggested Citation

  • Mery Patricia Tamayo Plata & Cristian Camilo Chica Castaño & Gustavo Javier Canavire-Bacarreza, 2021. "Analysis of the offshoring network: Empirical evidence of the implied comparative advantage in offshoring," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 30(1), pages 27-46, January.
    • Handle: RePEc:taf:jitecd:v:30:y:2021:i:1:p:27-46
    DOI: 10.1080/09638199.2020.1804605
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