Offshoring and firm overlap: Welfare effects with non-sharp selection into offshoring

Stella Capuano; Harmut Egger; Michael Koch; Hans Jörg Schmerer

doi:10.1111/roie.12445

Offshoring and firm overlap: Welfare effects with non-sharp selection into offshoring

Stella Capuano, Harmut Egger^*, Michael Koch, Hans Jörg Schmerer

^*Corresponding author af dette arbejde

Publikation: Bidrag til tidsskrift/Konferencebidrag i tidsskrift /Bidrag til avis › Tidsskriftartikel › Forskning › peer review

Abstract

Using German establishment data, we provide evidence for selection of larger, more productive producers into offshoring. However, the selection is not sharp, and offshoring and nonoffshoring producers coexist over a wide range of the revenue distribution. To explain this overlap, we set up a model of offshoring, in which we decouple offshoring status from revenues through heterogeneity in two technology parameters. In an empirical analysis, we employ German establishment data to estimate key parameters of the model and show that disregarding the overlap has large quantitative effects. It lowers the estimated gains from offshoring by almost 50% and, at the same time, exaggerates the role of the extensive margin for explaining the evolution of German offshoring since the 1990s.

Originalsprog	Engelsk
Tidsskrift	Review of International Economics
Vol/bind	28
Nummer	1
Sider (fra-til)	138-167
Antal sider	30
ISSN	0965-7576
DOI	https://doi.org/10.1111/roie.12445
Status	Udgivet - 1 feb. 2020
Udgivet eksternt	Ja

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abstract = "Using German establishment data, we provide evidence for selection of larger, more productive producers into offshoring. However, the selection is not sharp, and offshoring and nonoffshoring producers coexist over a wide range of the revenue distribution. To explain this overlap, we set up a model of offshoring, in which we decouple offshoring status from revenues through heterogeneity in two technology parameters. In an empirical analysis, we employ German establishment data to estimate key parameters of the model and show that disregarding the overlap has large quantitative effects. It lowers the estimated gains from offshoring by almost 50% and, at the same time, exaggerates the role of the extensive margin for explaining the evolution of German offshoring since the 1990s.",

author = "Stella Capuano and Harmut Egger and Michael Koch and Schmerer, {Hans J{\"o}rg}",

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T2 - Welfare effects with non-sharp selection into offshoring

AU - Capuano, Stella

AU - Egger, Harmut

AU - Koch, Michael

AU - Schmerer, Hans Jörg

PY - 2020/2/1

Y1 - 2020/2/1

N2 - Using German establishment data, we provide evidence for selection of larger, more productive producers into offshoring. However, the selection is not sharp, and offshoring and nonoffshoring producers coexist over a wide range of the revenue distribution. To explain this overlap, we set up a model of offshoring, in which we decouple offshoring status from revenues through heterogeneity in two technology parameters. In an empirical analysis, we employ German establishment data to estimate key parameters of the model and show that disregarding the overlap has large quantitative effects. It lowers the estimated gains from offshoring by almost 50% and, at the same time, exaggerates the role of the extensive margin for explaining the evolution of German offshoring since the 1990s.

AB - Using German establishment data, we provide evidence for selection of larger, more productive producers into offshoring. However, the selection is not sharp, and offshoring and nonoffshoring producers coexist over a wide range of the revenue distribution. To explain this overlap, we set up a model of offshoring, in which we decouple offshoring status from revenues through heterogeneity in two technology parameters. In an empirical analysis, we employ German establishment data to estimate key parameters of the model and show that disregarding the overlap has large quantitative effects. It lowers the estimated gains from offshoring by almost 50% and, at the same time, exaggerates the role of the extensive margin for explaining the evolution of German offshoring since the 1990s.

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Offshoring and firm overlap: Welfare effects with non-sharp selection into offshoring

Abstract

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