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Cross-regional Variations in Offshore Outsourcing Choices: Evidence from Firm-level Data

Author

Listed:
  • Eiichi TOMIURA
  • Banri ITO
  • Ryuhei WAKASUGI

Abstract

In offshoring, a firm chooses outsourcing to independent suppliers or in-sourcing from their FDI subsidiaries. This paper empirically examines how the factor intensity is related with the firm's offshore make-or-buy decision based on the Japanese direct firm-level data of offshoring across all manufacturing industries. This paper confirms that in-sourcing firms tend to be substantially more capital-intensive than outsourcing firms, even if firm size or industry is controlled for. Among the firms offshoring to China compared with North, firms with wider range of capital-labor ratio choose to integrate but relatively capital-intensive firms are active in outsourcing.

Suggested Citation

  • Eiichi TOMIURA & Banri ITO & Ryuhei WAKASUGI, 2008. "Cross-regional Variations in Offshore Outsourcing Choices: Evidence from Firm-level Data," Discussion papers 08029, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:08029
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    References listed on IDEAS

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    9. repec:hrv:faseco:4784029 is not listed on IDEAS
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