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Off-shoring, specialization and R&D


Authors
External Authors

Bournakis, I.

Vecchi, M.
Related Themes
Productivity, Trade, and Regional EconomiesJournal
Review of Income and Wealth
Publisher
Wiley-Blackwell
External Resources
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.
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