European Trade in Parts and Components: searching (for a trade model for searching) for offshoring evidence
Giovedì 31 marzo 2011, ore 11.00, Facoltà di Economia e Scienze Politiche, Aula D, Richard Frensch - University of Regensburg
Introduce: Cristiano Perugini, Università di Perugia
Abstract: Recent empirical studies have been searching for evidence on and driving forcesfor offshoring. Typically, this search has been conducted by analysing gross trade flowsrelated to offshored activities using gravity equations augmented by ad hoc measures ofsupply-side country differences. This paper suggests that gravity formulations of this sortare potentially mis-specified, due to theoretically unmotivated attempts of allowing forboth complete and incomplete specialisation influences on gross trade flows within thesame gravity framework. The paper suggests an alternative specification rooted inincomplete specialisation with complete specialisation as a natural limiting case. Resultssupport evidence for offshoring activities across Europe, driven by supply-side countrydifferences compatible with models of incomplete specialisation and trade. Furtherinterpretation of the results in the spirit of Grossman and Rossi-Hansberg (2008)suggests the conjecture that the latest waves of offshoring activities from “old” to “new”EU members may have been more likely to hurt (low-skill) workers in the old EU thanoffshoring to east Asia.
JEL-Classification: F14, F16, L24
Keywords: Offshoring, gravity
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