Heterogeneous Globalization: Offshoring and Reorganization

60 Pages Posted: 16 Mar 2020 Last revised: 17 May 2021

See all articles by Andrew B. Bernard

Andrew B. Bernard

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Teresa Fort

Dartmouth College - Tuck School of Business

Valerie Smeets

Universidad Carlos III de Madrid

Frederic Warzynski

Aarhus University - Department of Economics and Business Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 2020

Abstract

This paper exploits a unique offshoring survey to show that firms continue domestic production of the same goods they offshore to low-wage countries. This shift towards “produced-good imports” coincides with a reallocation of labor from physical production to innovation and technology occupations, and an increase in domestically-produced varieties' unit values. These responses suggest an additional, firm-level benefit of trade liberalization: the opportunity to offshore production of low-quality varieties, thereby freeing up domestic resources for the development, production, and marketing of higher-quality varieties. Firms’ reactions also motivate a new offshoring measure – produced- good imports – that is readily observed in most firm-level datasets.

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Suggested Citation

Bernard, Andrew B. and Fort, Teresa C. and Smeets, Valerie and Warzynski, Frederic, Heterogeneous Globalization: Offshoring and Reorganization (March 2020). NBER Working Paper No. w26854, Available at SSRN: https://ssrn.com/abstract=3554875

Andrew B. Bernard (Contact Author)

Dartmouth College - Tuck School of Business ( email )

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HOME PAGE: http://mba.tuck.dartmouth.edu/pages/faculty/Andrew.Bernard/

National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR) ( email )

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Teresa C. Fort

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Valerie Smeets

Universidad Carlos III de Madrid ( email )

E-28903 Getafe (Madrid)
Spain

Frederic Warzynski

Aarhus University - Department of Economics and Business Economics ( email )

hermodsvej 22
DK-8230 Åbyhøj
Denmark
+45 89 48 61 95 (Phone)

HOME PAGE: http://www.hha.dk/~fwa/frederic.htm

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