Gains from Offshoring? Evidence from New U.S. Microdata

Posted: 4 Feb 2013

See all articles by Ryan Monarch

Ryan Monarch

Federal Reserve Board

Jooyoun Park

Kent State University

Jagadeesh Sivadasan

University of Michigan, Stephen M. Ross School of Business

Date Written: January 21, 2013

Abstract

We construct a new linked data set with over one thousand off shoring events by matching Trade Adjustment Assistance program petition data to micro-data from the U.S. Census Bureau. We exploit this data to assess how offshoring impacts domestic firm-level aggregate employment, output, wages and productivity. A class of models predicts that more productive firms engage in offshoring, and that this leads to gains in output and (measured) productivity, and potential gains in employment and wages, in the remaining domestic activities of the offshoring firm. Consistent with these models, we find that offshoring firms are on average larger and more productive compared to non-offshorers. However, we fi nd that offshorers suffer from a large decline in employment (32 percent) and output (28 percent) relative to their peers even in the long run. Further, we find no significant change in average wages or in total factor productivity measures at affected firms. We find these results robust to a variety of checks. Thus we find no evidence for positive spillovers to the remaining domestic activity of firms in this large sample of offshoring events.

Keywords: Offshoring, Employment, Trade, Productivity, Firm Performance

JEL Classification: F14, F16, F23, F61, F66

Suggested Citation

Monarch, Ryan and Park, Jooyoun and Sivadasan, Jagadeesh, Gains from Offshoring? Evidence from New U.S. Microdata (January 21, 2013). Available at SSRN: https://ssrn.com/abstract=2211571 or http://dx.doi.org/10.2139/ssrn.2211571

Ryan Monarch

Federal Reserve Board ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Jooyoun Park (Contact Author)

Kent State University ( email )

Department of Economics
College of Business
Kent, OH 44242
United States
(330) 672 - 1086 (Phone)

HOME PAGE: http://www.personal.kent.edu/~jpark8/index.htm

Jagadeesh Sivadasan

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
259
PlumX Metrics