The external effects of offshoring on job security in SMEs

Abstract

Offshoring leads to higher job exits in small and medium-sized enterprises (SMEs) that do not offshore themselves, as per new evidence from manufacturing firms in Sweden. This effect is highest for less educated and older workers. Manufacturers are ever more involved in fragmented supply chains where they supply intermediate inputs to one another. This suggests that any decision made by one manufacturer to offshore (replace a local supplier with a foreign one) may have negative effects on the workers of other firms. SMEs may be more vulnerable to offshoring because they tend to be more local in their activities, although they may not offshore themselves. This study uses a data set from Sweden to explore the effects of offshoring on the job security of workers in small and medium-size enterprises (SMEs). We find that offshoring activities within Sweden lead to higher job exits in SMEs that do not offshore themselves. This effect is highest for low skill (less educated) and older workers. Policy makers should be aware of the vulnerability of SMEs to offshoring activities of other often-larger firms through channels related to supply chains.

De la deslocalización a la relocalización: ¿Qué nos espera?

“…Ya en 2016, la campaña presidencial de Donald Trump se basó explícitamente en una plataforma que enfatizaba la necesidad de "traer de vuelta los trabajos a Estados Unidos desde en el extranjero" (El-Sahli et al 2022). En Estados Unidos, el imparable crecimiento de la economía china y su disputa del liderazgo en la economía mundial y especialmente en el sector tecnológico provocó el inicio de la denominada Guerra Comercial en marzo de 2018, con la imposición por parte del gobierno de Donald Trump de aranceles a determinados productos provenientes del país asiático, respondido por China con la aplicación de gravámenes a 106 productos estadounidenses.…”