Kiel Working Papers, Kiel Institute for World Economics
No 1699:
Does Domestic Offshoring Precede International Offshoring? Industry-level Evidence
Franz-Josef Bade, Eckhardt Bode and Eleonora Cutrini
Abstract: This paper presents descriptive evidence suggesting that
there may be something to be learned about the future patterns of
international offshoring from the recent patterns of “domestic offshoring”,
the relocation of activities across regions within countries. Industries
appear to offshore activities first within the same country and only later
across the national border. Investigating the domestic and international
offshoring patterns for West German manufacturing industries between 1992
and 2007, we find that, on the one hand, industries that offshored more
extensively domestically offshored less extensively internationally, and
vice versa. On the other hand, we find that those industries that offshored
more extensively domestically were still in earlier stages of their life
cycles while those that offshored more extensively internationally were
already in later stages. International unbundling may consequently not be
as unpredictable as it is currently believed to be
Keywords: International offshoring, domestic offshoring, functional fragmentation, industry life cycle, Germany, K density; (follow links to similar papers)
JEL-Codes: C46,; F21,; R12; (follow links to similar papers)
38 pages, May 2011
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