The Offshoring Phenomenon

Main Article Content

Mery Patricia Tamayo Plata


Offshoring, Internalization, Skilled Labor.


This paper explains some definitions which are necessary in order to understand the offshoring concept, going through the most relevant works about the development of the offshoring phenomenon and its impact on the demand for labor and on the most skilled workers' income. It is evidenced that the offshoring processes not only deal with the purchase and sale of goods anymore, but that the service sector has an increasingly important role, and that the lower cost is not the only aspect that matters when offshoring, but aspects such as the language and culture are also considered. It is also found that technology and research related services flow not only from the parent companies towards its subsidiaries, but from firms in less developed countries to other companies in advanced countries. It concludes with a review of the works that explores the relationship between offshoring, employment and wages, from both, a macro and microeconomic outlook. In the latter case, special consideration is given to the work carried out by Amity and Wei (2006), Crinó (2010), and Geishecker and Görg (2013).


Download data is not yet available.
Abstract 1097 | PDF (Español) Downloads 1324


Amiti, M. y Wei, S.-J. (2005). Service offshoring, productivity, and employment: Evidence from the United States. IMF Working Paper 05/238. Washington, DC.

Amiti, M. y Wei, S.-J. (2005). Fear of service outsourcing: Is it justified? Economic Policy, 20(42), 308-47.

Amiti, M. y Wei, S.-J. (2006). Does service offshoring lead to job losses? Evidence from the United States. NBER Chapters, in: International Trade in Services and Intangibles in the Era of Globalization, National Bureau of Economic Research, Inc.

Antràs, P. y Helpman, E. (2004). Global Sourcing. Journal of Political Economy, 112(3), 552-80.

Añon, D.; Driffiel, N. y Temouri, Y. (2010). The futures of Offshoring FDI in High-tech Sectors. Futures, 42, 960-70.

Baumol, W. (2001). When is inter-firm coordination beneficial? The case of innovation. International Journal of Industrial Organization, 19, 727-37.

Bernand, A. B.; Jensen, J. B.; Redding, S. y Schott, P. K. (2007). Firms in International Trade. NBER Working Paper No. 13054.

Blinder, A. (2006). Offshoring: The Next Industrial Revolution? Foreign Affairs, 85(2), 113-28.

Bulow, J. y Summers, L. (1986). A Theory of Dual Labor Markets, with Applications to Industrial Policy, Discrimination, and Keynesian Unemployment. Journal of Labor Economics, 4, 376-414.

Cámara de Guipúzcoa (2005). El fenómeno de la deslocalización: propuesta de acciones para minimizar sus efectos. Gipuzkoa, España.

Canals, C. (2006). Outsourcing and your Collar's Color. Working Paper Series No. 03/2006, La Caixa.

Canals, C. (2006). What Explains the Widening Wage Gap? Outsourcing vs. Technology. Working Paper Series No. 01/2006, La Caixa.

Castellani, D. y Pieri, F. (próxima publicación). R&D Offshoring and the Productivity Growth of European Regions. Research Policy, DOI: 10.1016/j.respol.2013.05.009.

CDTI - Centro para el Desarrollo Tecnológico Industrial (2007). La deslocalización empresarial en España. Cuadernos CDTI de la Innovación Tecnológica.

Comité Económico y Social Europeo, CCMI (2005). Alcance y efectos de la deslocalización de empresas. Diario Oficial de la Unión Europea.

Crinó, R. (2010). Service Offshoring and White-Collar Employment. Review of Economic Studies, 77, 595-632.

Criscuolo, C. y Garicano, L. (mayo 2 de 2010). Offshoring and Wage Inequality: Using Occupational Licensing as a Shifter of Offshoring Costs. American Economic Review, 439-43.

Dunne, T. y Schmitz, J. (1992). Wages, Employer Size-Wage Premia and Employment Structure: Their Relationship to Advanced-Technology Usage at U.S. Manufacturing Establishments. Discussion Papers Center for Economic Studies CES 92-15, Bureau of the Census.

Dunning, J. H. (1988). Explaning International Production, Londres, Reino Unido: Unwin Hyman.

Ekholm, K. y Hakkala, K. (2006). The Effect of Offshoring on Labor Demand: Evidence from Sweden. CEPR Discussion Papers 5648.

European Industrial Relations Observatory (2006). Relocation of Production and Industrial Relations.

European Monitoring Centre on Change (2005). Offshore Outsourcing of Business Services.

Feenstra, R. y Hanson, G. (1999). The Impact of Outsourcing and High Technology Capital on Wages: Estimates for the United States, 1979-1990. Quarterly Journal of Economics, 114, 907-40.

Feenstra, R. (2004). Advanced International Trade, Theory and evidence. Princeton, NJ: Princeton University Press.

Feenstra, R. (2007). Globalization and its Impact on Labour, wiiw. Working Paper Series No. 44. The Vienna Institute for International Economic Studies.

Feenstra, R. (2010). Offshoring in the Global Economy: Microeconomic Structure and Macroeconomic Implications. Cambridge, MA: The MIT Press.

García-Vega, M. y Huergo, E. (2010). Transferencia de tecnología de las multinacionales. En L. Sanz y L. Cruz (coords.), Análisis sobre ciencia e innovación en España. España: Fundación Española para la Ciencia y la Tecnología (Fecyt).

García-Vega, M. y Huergo, E. (2011). Determinants of International R&D Outsourcing: The Role of Trade. Review of Development Economics, 15(1), 93-107.

Geishecker, I. (2006). Does outsourcing to Central and Eastern Europe really threaten manual workers’ jobs in Germany? The World Economy, 29(5), 559-83.

Geishecker, I. y Görg, H. (2008). Winners and Losers: A micro-level Analysis of International Outsourcing and Wages. Canadian Journal of Economics, 41(1), 243-70.

Geishecker, I. y Görg, H. (2013). Services Offshoring and Wages: Evidence from Micro data. Oxford Economic Papers, 65(1), 124-46.

Glass, A. J. y Saggi, K. (2002). Innovation and Wage Effects of International Outsourcing. European Economics Review, 45, 67-86.

Griffith, R.; Harrison, R. y Van Reenen, J. (2006). How Special is the Special Relationship? Using the Impact of U.S. R&D Spillovers on U.K. Firms as a Test of Technology Sourcing. The American Economic Review, 96(5), 1859-75.

Grossman, G. y Rossi-Hansberg, E. (2008). Trading Task: A Simple Theory of offshoring. The American Economic Review, 98(5), 78-97.

Hamermesh, D.S. (1993). Labor Demand. Princeton, NJ: Princeton University Press.

Helpman, E. y Krugman, P. R. (1985). Market Structure and Foreign Trade. Cambridge, MA: The MIT Press.

Hijzen, A.; Görg, H. y Hine, R. C. (2005). International Outsourcing and the Skill Structure of Labor Demand in the United Kingdom. Economic Journal, 115, 860-78.

Jensen, P. (2009). A Learning Perspective on the Offshoring of Advance Service. Journal of International Management, 15, 181-93.

Keuschnigg, C. y Ribi, E. (2009). Outsourcing unemployment and Welfare Policy. Journal of International Economics, 78, 168-76.

Kremer, M. (1993). The O-Ring Theory of Economic Development. The Quarterly Journal of Economics, 108, 551-75.

Lai, E.; Riezman, R. y Ping, W. (2009). Outsourcing of Innovation. Economic Theory, 38(3), 485-515.

Markusen, J. (2005). Modeling the Offshoring of White-Collar Services: from Comparative Advantage to the New Theories of Trade and Foreign Direct Investment. NBER Working Papers Series 11827.

Mayer, T. y Ottaviano, G. (2008). The Happy Few: The Internationalization of European Firms. Intereconomics: Review of European Economic Policy, 43(3), 135-48.

Metters, R. y Verma, R. (2008). History of Offshoring Knowledge Services. Journal of Operations Management, 26, 141-47.

Mitra, D. y Ranjan, P. (2008). Temporary Shocks and Offshoring: The Role of External Economies and Firm Heterogeneity. Journal of Development Economics, 87, 76-84.

Muñoz, M. (2002). Deslocalización sectorial de la inversión directa extranjera en España. Boletín Económico de Información Comercial Española, 2744, 19-30.

OECD (2007): Offshoring and Employment. Trends and Impacts.

Trefler, D. (2005). Service Offshoring: Threats and Opportunities. Brookings Trade Forum, 35-60.

Tomiura, E. (2007). Foreign Outsourcing, Exporting, and FDI: A Productivity Comparison at the Firm Level. Journal of International Economics, 72(1), 113-27.

Williamson, O. (1971). The Vertical Integration of Production: Market Failure Considerations. American Economic Review, 61(2), 112-123.

Youngdahl, W.; Ramaswamy, K. y Verma, R. (2008). Introduction to the Special Issue: Exploring New Research Frontiers in Offshoring Knowledge and Service Processes. Journal of Operations Management.