Service Offshoring and Productivity: Evidence from the United States

24 Pages Posted: 25 Jan 2006 Last revised: 4 Aug 2010

See all articles by Mary Amiti

Mary Amiti

Federal Reserve Bank of New York

Mary Amiti

International Monetary Fund (IMF) - Trade Unit; University of Melbourne - Department of Economics; Centre for Economic Policy Research (CEPR)

Shang-Jin Wei

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); International Monetary Fund (IMF); Tsinghua University - School of Economics & Management

Date Written: January 2006

Abstract

The practice of sourcing service inputs from overseas suppliers has been growing in response to new technologies that have made it possible to trade in some business and computing services that were previously considered non-tradable. This paper estimates the effects of offshoring on productivity in US manufacturing industries between 1992 and 2000. It finds that service offshoring has a significant positive effect on productivity in the US, accounting for around 10 percent of labor productivity growth during this period. Offshoring material inputs also has a positive effect on productivity, but the magnitude is smaller accounting for approximately 5 percent of productivity growth.

Suggested Citation

Amiti, Mary and Amiti, Mary and Wei, Shang-Jin, Service Offshoring and Productivity: Evidence from the United States (January 2006). NBER Working Paper No. w11926. Available at SSRN: https://ssrn.com/abstract=876029

Mary Amiti (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Mary Amiti

International Monetary Fund (IMF) - Trade Unit ( email )

700 19th Street NW
Washington, DC 20431
United States
202-986-3572 (Phone)
202-589-7767 (Fax)

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia
+61 3 8344 7652 (Phone)
+61 3 8344 6899 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Shang-Jin Wei (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

Tsinghua University - School of Economics & Management

Beijing, 100084
China

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