Kiel Working Papers, Kiel Institute for World Economics
No 1541:
Outsourcing Motives, Location Choice and Labour Market Implications: An Empirical Analysis for European Countries
Marcus Neureiter and Peter Nunnenkamp
Abstract: We use data on motives of international outsourcing and
location choices from a recent survey of European companies to assess the
labour market repercussions at home. Employing Tobit models we
differentiate between job losses as well as job creation for high and low
skilled employees at the sector level in ten European home countries. Our
findings are in conflict with public concerns about adverse employment
effects resulting primarily from cost-oriented sourcing in low wage
locations. The quantitative impact on job losses remains modest in the case
of cost-saving motives. The simple divide between low and high wage
locations hides substantial heterogeneity within both groups. We also find
that job losses are typically compensated partly by new job creation,
particularly for high skilled workers
Keywords: outsourcing, outward FDI, motives, location choice, job loss, job creation, (un)skilled labour; (follow links to similar papers)
JEL-Codes: F23,; J21; (follow links to similar papers)
29 pages, August 2009
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