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Productivity Attributable To Offshoring In Selected Countries

Author

Listed:
  • D. Victoria Decuir – Herrera

    (Undergraduate of Economics, Department of Economics, MacEwan University, Edmonton, Canada)

  • Constantin Colonescu

    (n Economics, Department of Economics, MacEwan University, Edmonton, Canada)

  • Rafat Alam

    (Economics, Department of Economics, MacEwan University, Edmonton, Canada)

Abstract

The term offshoring refers to the process when firms decide to manufacture products abroad to reduce costs and to produce more efficiently. In the field of economics, offshoring is not a new topic, however, the rapid increase in offshoring induced by the incentive of creating a more efficient production, technological changes, and competition to reduce costs has been globally overlooked. Nonetheless, the rate of change in productivity is different among countries due to their uniqueness and resources, as well as between the different sectors of the economy. Although there are many published studies about inward Foreign Direct Investment (FDI), there are not many available studies that focus on the relationship between outward FDI and productivity, additionally, much less in sectors of the economy other than manufacturing and services. For this reason, in an effort to explain the phenomenon of the latter, a multiple linear regression was created to determine the outward FDI of the sectors of the economy that significantly influence productivity. To measure productivity attributable to offshoring, the model used data on outward FDI per sector of the economy and compared to each countrys Gross Domestic Product (GDP) per hour worked. It was found that, in general, there is a distinctively higher productivity in the manufacturing and services sector than other sectors of the economy. This paper presents an alternative way to measure the productivity of offshoring.

Suggested Citation

  • D. Victoria Decuir – Herrera & Constantin Colonescu & Rafat Alam, "undated". "Productivity Attributable To Offshoring In Selected Countries," Review of Socio - Economic Perspectives 201938, Reviewsep.
  • Handle: RePEc:aly:journl:201938
    DOI: https://doi.org/10.19275/RSEP063
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    References listed on IDEAS

    as
    1. Karsten Bjerring Olsen, 2006. "Productivity Impacts of Offshoring and Outsourcing: A Review," OECD Science, Technology and Industry Working Papers 2006/1, OECD Publishing.
    2. Calista Cheung & James Rossiter & Yi Zheng, 2008. "Offshoring and Its Effects on the Labour Market and Productivity: A Survey of Recent Literature," Bank of Canada Review, Bank of Canada, vol. 2008(Autumn), pages 17-30.
    3. Agnese, Pablo & Joan Enric, Ricart, 2009. "Offshoring: Facts and numbers at the country level," MPRA Paper 16503, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Offshoring; productivity; sectors of the economy; inward Foreign Direct Investment (FDI); outward Foreign Direct Investment (FDI);
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F10 - International Economics - - Trade - - - General
    • F69 - International Economics - - Economic Impacts of Globalization - - - Other

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