Working Paper: NBER ID: w26355
Authors: Andrea Ariu; Katariina Nilsson Hakkala; J. Bradford Jensen; Saara Tamminen
Abstract: This paper uses unique Finnish firm-level micro data on service imports, work- force composition, and firm characteristics to examine changes in employment composition and performance of Finnish service importers during a period of a significant increase in services imports (2002-2012). We use world service export supply shocks, which we allocate to firms based on their highly specialized service input structure, as an instrument to identify the impact of service offshoring. We find that firms that increase imports of service inputs reduce employment of low-skill service workers, increase employment of (high-skilled) managers and improve their performance in terms of sales (turnover), assets, service exports, and firm survival. The employment composition and performance responses to service imports differ across firms in the manufacturing sector and those in the service sector.
Keywords: service imports; workforce composition; firm performance; Finnish microdata
JEL Codes: F10; F14; L80
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| service imports (F10) | employment of low-skill service workers (J68) |
| service imports (F10) | employment of high-skilled professionals and managers (J24) |
| service offshoring (L86) | firm performance (L25) |
| service offshoring (L86) | employment of medium-skilled professionals in manufacturing firms (L69) |
| service offshoring (L86) | survival rates in manufacturing firms (L20) |