Working Paper: NBER ID: w11926
Authors: Mary Amiti; Shangjin Wei
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.
Keywords: Service Offshoring; Productivity; U.S. Manufacturing
JEL Codes: F1; F2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Service offshoring (L86) | Efficiency gains (D61) |
| Service offshoring (L86) | Productivity (O49) |
| Material offshoring (F23) | Productivity (O49) |
| Service offshoring (L86) | Total Factor Productivity (TFP) (D24) |
| Material offshoring (F23) | Total Factor Productivity (TFP) (D24) |