Off‐Shoring, Specialization and R&D. (27th July 2016)

• Record Type: Journal Article
• Authors: Bournakis, Ioannis; Vecchi, Michela; Venturini, Francesco
• Is Part Of: Review of income and wealth. Series 64:Number 1(2018)
• Page Start: 26
• Page End: 51
• Publication Date: 2016-07-27
• Subjects: F14 -- F6 -- L16 -- O30; High‐tech specialization -- off‐shoring -- productivity -- R&D -- OECD industries; National income -- Accounting -- Periodicals; 332.05
• DOI: 10.1111/roiw.12239
• Languages: English
• ISSNs: 0034-6586

Abstract

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.