Service Offshoring and Productivity: Evidence from the US

18 Pages Posted: 27 Apr 2009

See all articles by Mary Amiti

Mary Amiti

Federal Reserve Bank of New York

Shang-Jin Wei

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); International Monetary Fund (IMF); Tsinghua University - School of Economics & Management

Abstract

The practice of sourcing service inputs from overseas suppliers has been growing in response to new technologies that have made it possible to trade in some business and computing services that were previously considered non-tradable. This paper estimates the effects of offshoring on productivity in US manufacturing industries between 1992 and 2000. It finds that service offshoring has a significant positive effect on productivity in the United States, accounting for around 10 per cent of labour productivity growth during this period. Offshoring material inputs also have a positive effect on productivity, but the magnitude is smaller accounting for approximately 5 per cent of productivity growth.

Suggested Citation

Amiti, Mary and Wei, Shang-Jin, Service Offshoring and Productivity: Evidence from the US. World Economy, Vol. 32, Issue 2, pp. 203-220, February 2009. Available at SSRN: https://ssrn.com/abstract=1381820 or http://dx.doi.org/10.1111/j.1467-9701.2008.01149.x

Mary Amiti

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Shang-Jin Wei

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

Tsinghua University - School of Economics & Management

Beijing, 100084
China

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