Do Immigrants Spur Offshoring?: Firm-Level Evidence
(English)Manuscript (preprint) (Other academic)
Offshoring is an important aspect of firms’ internationalization. However, offshoring comes at a cost, especially where information or trust is lacking. Immigrant employees could reduce such offshoring costs through their knowledge of their former home countries and via access to foreign networks. We develop a framework of heterogeneous final-good firms to guide our empirical analysis and draw on new employer-employee data for approximately 12,000 Swedish firms during the time period 1998-2007. Our results support the hypothesis that immigrant employees spur offshoring activities by firms through lower offshoring costs. Hiring one additional foreign-born worker can increase offshoring up to three percent on average, with skilled migrants having the strongest effects.
Offshoring, migration, networks, trust, information, trade barriers.
Research subject Economics
IdentifiersURN: urn:nbn:se:oru:diva-54197OAI: oai:DiVA.org:oru-54197DiVA: diva2:1059937
ProjectsMigration, integration och företagens globalisering - hur bidrar migration och integration i arbetslivet till företagens globalisering?
FunderThe Jan Wallander and Tom Hedelius Foundation, W2013-0425:1