IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/10010.html
   My bibliography  Save this paper

Does Material and Service Offshoring Improve Domestic Productivity? Evidence from Japanese manufacturing industries

Author

Listed:
  • ITO Keiko
  • TANAKA Kiyoyasu

Abstract

An increasing number of manufacturers are shifting some stages of the production process offshore. This study investigates the effects of offshoring on productivity in Japanese manufacturing industries for the period 1988-2004. Material offshoring, as measured by an import share of intermediate material inputs, has steadily increased during the period, with a pronounced increase in offshoring to Asian countries. In a wide range of specifications, we find significantly positive correlations between material offshoring and productivity at the industry level. The estimates are particularly robust for offshoring to Asia. These results suggest that Japanese manufacturing firms have developed an extensive international division of labor in East Asia, which in turn may have enhanced domestic productivity. In contrast, service offshoring, as measured by an import ratio of service inputs, is not associated with industry-level productivity. We find a positive correlation between offshoring and productivity only for information services, suggesting that in this segment, offshoring offers potential benefits.

Suggested Citation

  • ITO Keiko & TANAKA Kiyoyasu, 2010. "Does Material and Service Offshoring Improve Domestic Productivity? Evidence from Japanese manufacturing industries," Discussion papers 10010, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:10010
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/10e010.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:wsr:wpaper:y:2016:i:165 is not listed on IDEAS
    2. MORIKAWA Masayuki, 2015. "Service Trade and Productivity: Firm-level evidence from Japan," Discussion papers 15030, Research Institute of Economy, Trade and Industry (RIETI).
    3. Victor Stolzenburg & Daria Taglioni & Deborah Winkler, 2019. "Economic upgrading through global value chain participation: which policies increase the value-added gains?," Chapters, in: Stefano Ponte & Gary Gereffi & Gale Raj-Reichert (ed.), Handbook on Global Value Chains, chapter 30, pages 483-505, Edward Elgar Publishing.
    4. KWON Hyeog Ug, 2012. "Offshoring of Japanese Small and Medium Enterprises (Japanese)," Discussion Papers (Japanese) 12004, Research Institute of Economy, Trade and Industry (RIETI).
    5. Bernhard Michel & François Rycx, 2014. "Productivity Gains and Spillovers from Offshoring," Review of International Economics, Wiley Blackwell, vol. 22(1), pages 73-85, February.
    6. Deborah Winkler & Thomas Farole, 2015. "Global Value Chain Integration and Productivity," World Bank Publications - Reports 23818, The World Bank Group.
    7. Lin, Songhua & Ma, Alyson C., 2012. "Outsourcing and productivity: Evidence from Korean data," Journal of Asian Economics, Elsevier, vol. 23(1), pages 39-49.
    8. Pablo Agnese, 2013. "Offshoring and productivity revisited: A Time-Series Analysis [Zur Debatte um Offshoring und Produktivität: Eine Zeitreihenanalyse]," Duesseldorf Working Papers in Applied Management and Economics 23, Duesseldorf University of Applied Sciences.
    9. Agnese, Pablo, 2013. "Offshoring and Productivity Revisited: A Time-Series Analysis," IZA Discussion Papers 7323, Institute for the Study of Labor (IZA).

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:10010. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.