International Relocation of Production and Growth

46 Pages Posted: 7 Jan 2019 Last revised: 11 Jan 2019

See all articles by Francisco Alcalá

Francisco Alcalá

Universidad de Murcia. Facultad de Economia y Empresa

Marta Solaz

Ivie-Instituto Valenciano de investigaciones Económicas

Date Written: December 2018

Abstract

The relocation of production and exports from the North to the South has been a central feature of economic globalization. Using data on approximately 5,000 products, this paper describes this process over the 1996-2014 period and assesses its impact on cross-country growth. Although increased competition from lower income countries tended to have a significant negative effect on the previous exporting countries of the relocated products, most rich countries were able to upgrade their export baskets and avoid a negative aggregate impact. A one-standard negative deviation in a country's export relocation index tended to reduce the country's annual growth by 0.3 percentage points at the median country income but had zero impact at the top of the country income distribution. Medium and low income countries were the most negatively affected by the increased competition from their pair countries.

Keywords: Globalization, growth, offshoring, product shocks, Trade

JEL Classification: F43, F62, O47

Suggested Citation

Alcalá, Francisco and Solaz, Marta, International Relocation of Production and Growth (December 2018). CEPR Discussion Paper No. DP13422. Available at SSRN: https://ssrn.com/abstract=3310349

Francisco Alcalá (Contact Author)

Universidad de Murcia. Facultad de Economia y Empresa ( email )

Campus de Espinardo
Espinardo, Murcia 30100
Spain
34-868883767 (Phone)
34-868883758 (Fax)

Marta Solaz

Ivie-Instituto Valenciano de investigaciones Económicas

Valencia
Spain

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