Off‐Shoring, Specialization and R&D

Abstract

This paper investigates whether off‐shoring promotes technological specialization by reallocating resources towards high‐tech industries and/or stimulating within industry R&D. Using data for the USA, Japan and Europe, our results show that material off‐shoring promotes high‐tech specialization through input reallocation between sectors, while service off‐shoring favors technologically advanced production by increasing within‐industry productivity, mainly via its positive impact on R&D. Conversely, we find that the increasing fragmentation of core production tasks, captured by narrow off‐shoring, has adverse effects on technological specialisation, which suggests that this type of off‐shoring is mainly pursued for cost‐reduction motives.

Inequalities During and After Transition in Central and Eastern Europe

“…Bloom et al (2012) show that the increasing trade between the US and China has freed resources in the US which have thus been directed towards hightech production. Bournakis et al (2014) find that off-shoring has positively affected R&D investments in several industries in a large sample of OECD countries. 11.…”

The business foundations of social economic progress

“…17 We consider the experience of the 1930s to have been the first stage of displacement of labor, in this instance by machines. In the second stage, labor has been and continues to be displaced by less expensive labor, in the form of outsourcing and offshoring; see, for example, Bournakis et al (2018). In the current and future third stage labor displacement is caused by new technology, including robotics and artificial intelligence; Acemoglu and Restrepo (2018) document the ''robust negative'' displacement effect of the industrial use of robots, although The Economist (25 June, 2016 and 26 August, 2017) foresees a less gloomy impact of artificial intelligence on labor displacement.…”