Can We Really Trust Offshoring Indices?

24 Pages Posted: 1 May 2018

See all articles by Davide Castellani

Davide Castellani

University of Reading

Luca De Benedictis

University of Macerata; Luiss University

Daniel Horgos

University of the German Federal Armed Forces - Department of Economics

Date Written: October 22, 2012

Abstract

This paper argues that offshoring indices often measure something different than what we think they are. Using data from input-output tables of 21 European countries from 1995 to 2006 we decompose an offshoring index, distinguishing between a domestic (structural change) and an international component (imported inputs ratio). Regarding offshoring of business services, a large share of the index variation is driven by the domestic component. This is even more pronounced for overall service offshoring. In the case of material offshoring, by contrast, the international component drives the main variation of the indices. Our results therefore show that, regarding (business) services, the typical calculation of offshoring indices tends to over estimate the role of the imported inputs component, neglecting the role played by structural changes in the economy.

Keywords: Offshoring, Structural Change, Input–Output Indices

JEL Classification: F10, F14

Suggested Citation

Castellani, Davide and De Benedictis, Luca and Horgos, Daniel, Can We Really Trust Offshoring Indices? (October 22, 2012). Structural Change and Economic Dynamics, Vol. 25, 2013, Available at SSRN: https://ssrn.com/abstract=3168514

Davide Castellani

University of Reading ( email )

Whiteknights
Reading, Berkshire RG6 6AH
United Kingdom

Luca De Benedictis (Contact Author)

University of Macerata ( email )

Via Crescimbeni 20
Macerata, MC 62100
Italy

HOME PAGE: http://docenti.unimc.it/luca.debenedictis

Luiss University ( email )

Viale Romania 32
Rome, 00198
Italy

Daniel Horgos

University of the German Federal Armed Forces - Department of Economics ( email )

Holstenhofweg 85
Hamburg, 22043
Germany

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