Offshoring and Skill-Upgrading in French Manufacturing: A Heckscher-Ohlin-Melitz View

59 Pages Posted: 18 Dec 2015

See all articles by Juan Carluccio

Juan Carluccio

Banque de France; Paris School of Economics

Alejandro Cunat

London School of Economics & Political Science (LSE) - Department of Economics; Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research; Centre for Economic Policy Research (CEPR)

Harald Fadinger

University of Mannheim

Christian Fons-Rosen

University of California, Merced

Multiple version iconThere are 3 versions of this paper

Date Written: December 2015

Abstract

We present a factor-proportions trade model in which heterogeneous firms can offshore intermediate inputs subject to fixed offshoring costs. In the skill-abundant country, high-productivity firms offshore a larger range of labor-intensive inputs to the labor-abundant countries than low-productivity firms. Differently from the traditional versions of factor-proportions trade theory, Heckscher-Ohlin forces operate at the within-industry level, leading to endogenous within-industry variation in skill intensity that is positively correlated with firm productivity. Using French firm-level data for the years 1996 to 2007, we provide empirical support for the factor proportions channel through which offshoring to labor-abundant countries affects the firm-level skill intensities of French manufacturers.

Keywords: offshoring, heterogeneous firms, firm-level factor intensities, Heckscher-Ohlin

JEL Classification: F11, F12, F14

Suggested Citation

Carluccio, Juan and Cunat, Alejandro and Fadinger, Harald and Fons-Rosen, Christian, Offshoring and Skill-Upgrading in French Manufacturing: A Heckscher-Ohlin-Melitz View (December 2015). Banque de France Working Paper No. 580, Available at SSRN: https://ssrn.com/abstract=2704966 or http://dx.doi.org/10.2139/ssrn.2704966

Juan Carluccio (Contact Author)

Banque de France ( email )

Paris
France

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Alejandro Cunat

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 6961 (Phone)

Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research ( email )

Via Roentgen 1
Milan, 20136
Italy

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Harald Fadinger

University of Mannheim ( email )

Universitaetsbibliothek Mannheim
Zeitschriftenabteilung
Mannheim, 68131
Germany

Christian Fons-Rosen

University of California, Merced ( email )

P.O. Box 2039
Merced, CA 95344
United States

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