Offshoring and the Polarization of the Demand for Capital

23 Pages Posted: 14 May 2020

See all articles by Dirk Bursian

Dirk Bursian

Deutsche Bundesbank

Arne Nagengast

Deutsche Bundesbank - Economics Department

Date Written: January 2020

Abstract

In the past decades, the importance of different capital goods has gradually changed, which has led to a structural shift in the composition of the demand for capital at the expense of more traditional capital inputs such as machinery and equipment. In this paper, we focus on a novel driver of this development by analyzing the effect of offshoring on the demand for capital by asset class using a rich country‐sector panel dataset. Estimating a system of factor demand equations, we document that offshoring reduces the relative demand for non‐ICT capital, thereby polarizing the demand for capital.

JEL Classification: F14, F62, E22

Suggested Citation

Bursian, Dirk and Nagengast, Arne, Offshoring and the Polarization of the Demand for Capital (January 2020). Economic Inquiry, Vol. 58, Issue 1, pp. 260-282, 2020, Available at SSRN: https://ssrn.com/abstract=3596426 or http://dx.doi.org/10.1111/ecin.12828

Dirk Bursian (Contact Author)

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Arne Nagengast

Deutsche Bundesbank - Economics Department ( email )

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany

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

Paper statistics

Downloads
0
Abstract Views
72
PlumX Metrics