Does Offshoring Pay? Firm-Level Evidence from Japan

16 Pages Posted: 15 Sep 2010

See all articles by Alexander Hijzen

Alexander Hijzen

Organization for Economic Co-Operation and Development (OECD)

Tomohiko Inui

Nihon University - College of Economics

Yasuyuki Todo

Waseda University

Multiple version iconThere are 2 versions of this paper

Abstract

This article explores the impact of offshoring on productivity using firm-level data for the Japanese manufacturing industries during the period 1994–2000. We find that intrafirm offshoring, that is, sourcing of intermediate inputs to foreign affiliates within a particular multinational firm, has generally a positive effect on productivity of the offshoring firm, while arm’s-length offshoring, that is, sourcing to unaffiliated foreign firms, does not have such an effect. In addition, the impact of arm’s-length offshoring is negative for nonmultinationals and nonexporters but nonnegative for multinationals and exporters. These results suggest that the costs of searching foreign firms suitable for offshoring are nonnegligible.

JEL Classification: F14, L23

Suggested Citation

Hijzen, Alexander and Inui, Tomohiko and Todo, Yasuyuki, Does Offshoring Pay? Firm-Level Evidence from Japan. Economic Inquiry, Vol. 48, No. 4, pp. 880-895, October 2010, Available at SSRN: https://ssrn.com/abstract=1677114 or http://dx.doi.org/10.1111/j.1465-7295.2008.00175.x

Alexander Hijzen (Contact Author)

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Tomohiko Inui

Nihon University - College of Economics ( email )

Tokyo
Japan

Yasuyuki Todo

Waseda University ( email )

1-104 Totsukamachi, Shinjuku-ku
tokyo, 169-8050
Japan

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
3
Abstract Views
493
PlumX Metrics