Fear of service outsourcing: is it justified?

Amiti, Mary; Wei, Shang‐Jin

doi:10.1111/j.1468-0327.2005.00140.x

Cited by 302 publications

(50 citation statements)

References 30 publications

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“…Consistent with the theoretical ambiguity, the results of empirical analyses are mixed. Amiti and Wei (2005) found a positive correlation between services offshoring and employment in the UK between 1995 and 2001. Focusing on US sector-level data, Amiti and Wei (2009) identified a negative effect of services offshoring on employment, using disaggregated data (450 sectors).…”

Section: Introductionmentioning

confidence: 94%

“…First, outsourcing or offshoring of activities previously performed in-house has a direct negative effect on labour demand by downstream manufacturing (L d ). In the case of outsourcing, there will be a reallocation of demand for services workers from downstream manufacturing to upstream services sectors, while in the case of offshoring there might be direct replacement of domestic workers providing services by more efficient or less expensive foreign workers employed abroad (the implications of offshoring are discussed in detail by Amiti & Wei, 2005Winkler, 2010). We characterise such negative relationships between upstream services reforms and downstream manufacturing employment as the "substitution effect," given by 4 A detailed description of the sector-specific policy and institutional indicators reported in the EBRD Transition Indicators Database is provided in Appendix C. 5 An analogous effect is also hypothesised in analyses of liberalisation of import tariffs on goods that are used as inputs (see of instance Amiti & Konings, 2007;Halpern et al, 2015;Topalova & Khandelwal, 2011).…”

Section: General Mechanismsmentioning

confidence: 99%

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Services policy reform and manufacturing employment: Evidence from transition economies

Fiorini

Hoekman²,

Malgouyres

2018

World Economy

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Policy reforms targeting the services sectors are a neglected dimension of the process of structural transformation and economic development. The effects of such reforms on employment across industries as a function of their use of services as intermediate inputs are theoretically ambiguous and remain largely understudied. This paper uses sector‐level data for 24 transition economies for the 1990–2012 period to assess the impacts of services policy reforms on downstream manufacturing employment. We find a negative effect of services reforms on manufacturing sector employment. This is mostly associated with the process of transition to a market‐based economy. Controlling for transition‐specific dynamics, the data suggest a neutral effect of progress towards adopting “best practice” policies for upstream services on employment in downstream manufacturing. Furthermore, in line with the extant literature, we confirm that services policy reforms enhance productivity of downstream manufacturing industries. Finally, we find that the negative effects on downstream employment are mitigated in countries with better economic governance and human capital.

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Section: Introductionmentioning

confidence: 94%

Section: General Mechanismsmentioning

confidence: 99%

Services policy reform and manufacturing employment: Evidence from transition economies

Fiorini

Hoekman²,

Malgouyres

2018

World Economy

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“…Indeed, they tend to experience faster employment growth than firms that do not offshore. Similarly, Amiti and Wei (2005) find that sector-level employment in the United Kingdom (UK) has not been affected by offshoring. Crino (2007), on the other hand, finds that the employment effects of offshoring differ by occupation: offshoring raises employment in high-skill occupations, but lowers it among lowand medium-skilled ones.…”

Section: Figure 1: Per Capita Income In Ppp Terms Vs Services As a Pmentioning

confidence: 99%

Services as a New Engine of Growth for ASEAN, the People’s Republic of China, and India

Shepherd¹,

Pasadilla²

2012

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. This is a revised version of a background paper prepared for the Asian Development Bank (ADB)/ADBI study Role of Key Emerging Economies-ASEAN, the People's Republic of China, and India-for a Balanced, Resilient, and Sustainable Asia.The authors are grateful to Biswa Nath Bhattacharyay, Peter Petri, an anonymous reviewer, and participants at ADBI workshops for many helpful comments and suggestions, as well as to Ejaz Ghani, Pablo Gottret, and Annemie Maertens for generously sharing research and data.The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of ADBI, the ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractDevelopment of a vibrant and competitive services sector is a key characteristic of modern economies. In the developed world, services frequently account for two-thirds or three-quarters of all economic activity. The transition from agriculture through manufacturing to a services economy has been the hallmark of economic development for many countries. In line with this trend, we see many emerging markets currently working hard to support and develop services industries, and to put in place the regulatory structures required for more integrated international services markets. Doing so is likely to form an important part of efforts to avoid the so-called "middle income trap", as improving services sector productivity is key to invigorating the economy and supporting the sustained innovation needed to move to high income status.

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“…The ratio of imported intermediates to gross outputs of industrial products rose from 6% to 10% between 1980 and 2003, whereas the ratio in services was still only 1% in 2003. However the growth rate for offshoring intensity of services was much higher than in the industry (8.4% to 1.3% since 1990) such as the labour productivity generated by service offshoring (Amiti and Wei, 2005;Bräuninger, 2007).…”

Section: The International Offshoring Services Marketmentioning

confidence: 99%

New Bangalores? The role of Central and Eastern Europe in business and IT services offshoring

Gál

2013

JEDEP

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Abstract. The paper discusses how the second global shift in business services provision and corporate restructuring open up new offshoring opportunities into Central and Eastern Europe (CEE). It explores three issues: First, it builds upon the theoretical framework of the 'new paradigm of globalization, which considers offshoring as one of the most important globalizing forces of recent time. This results in a shift in global trade (2005), describes offshoring among the major "flatteners" of the technological, economic and social shifts that effectively leveled the economic world, and "accidentally made Beijing, Bangalore and Bethesda next-door neighbours". A global, Internet-enabled platform for various forms of sharing knowledge and tasks in services, irrespective of time, distance, geography and increasingly, language has created the flat World. Nevertheless, the world remains far from flat and proximity, geographical factors still matter a great deal for many service tasks, because their exchange requires face-to-face proximity between partners.Transportation and communication costs, as well as geographic proximity to customers, workers and suppliers have become less important for many service tasks. The rapid surge of globalisation, opening up of formerly isolated regions such as Eastern Europe, Russia and China to global trade, has substantially boosted task trade and service related cross-border investment. Many Eastern European countries invigorated by the EU enlargement became important locations for services to be offshored. The question is whether these locations might stand as a challenge for the overwhelmingly dominant global position of India and the other East Asian countries or only offer complementary offshoring base for the continental European companies preferring relocating their services nearby. There is a large amount of anecdotal information underpinned by the recent estimates of consultants' reports, which are viewing CEE as an attractive region for offshoring even in global context. Its leading cities are now seen by some analysts as "future Bangalores" in terms of providing offshoring solutions. This paper attempts to confirm the recent anecdotal evidence by means of using trade and specific location sites data in order to overcome the scarcity of consistent empirical contributions to measure the 1 Offshoring and outsourcing often used as an interchangeable phenomenon. While outsourcing is delegating an internal business process to an external company, offshoring means the geographical spread and decentralization of production of exchange through the relocation of activities from one site to another. Although, offshoring can occur in combination with outsourcing, but this need not be the case (online) =

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Fear of service outsourcing: is it justified?

Cited by 302 publications

References 30 publications

Services policy reform and manufacturing employment: Evidence from transition economies

Services policy reform and manufacturing employment: Evidence from transition economies

Services as a New Engine of Growth for ASEAN, the People’s Republic of China, and India

New Bangalores? The role of Central and Eastern Europe in business and IT services offshoring

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