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Do Immigrants Spur Offshoring?: Firm-Level Evidence
Örebro University, Orebro University School of Business, Örebro University, Sweden. The Ratio Institute, Stockholm, Sweden. (Internationell ekonomi)
Örebro University, Orebro University School of Business, Örebro University, Sweden. (Internationell ekonomi)ORCID iD: 0000-0002-5830-9831
GEP, University of Nottingham, Nottingham, United Kingdom.
Örebro University, Swedish Business School at Örebro University. (Internationell ekonomi)ORCID iD: 0000-0003-0149-9598
2016 (English)Conference paper, Presentation (Other academic)
Abstract [en]

Offshoring provides firms with opportunities for internationalization and growth. But, offshoring comes at a cost, especially in presence of inadequate information and trust friction. Immigrant employees could reduce such offshoring transaction costs through their knowledge of former home countries and via access to foreign networks. This is the first firm-level study on migration and offshoring. In estimating a firm-level gravity model on new employer-employee data for approximately 12,000 Swedish firms during the time period 1998-2007, we are able to show that immigrant employees have a significant and positive impact on offshoring. Hiring one additional foreign-born worker can spur offshoring with up to three percent on average, and even more to low-income countries. The findings of this study could have potentially important policy implications. In addition to showing that immigrants could provide options for countries that aim to promote offshoring, the results introduce a completely new channel through which migration may promote development, through offshoring. This could encourage governments of developed nations to enhance their emphasis on migration as a tool for supporting private sector development in emerging economies.

Place, publisher, year, edition, pages
2016.
Keyword [en]
Offshoring; migration; networks; trust; information; trade barriers
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:oru:diva-47389OAI: oai:DiVA.org:oru-47389DiVA: diva2:893607
Conference
2016 American Economic Association Annual Meeting, San Francisco, USA, January 3-5, 2016
Projects
Migration, integration och företagens globalisering
Funder
The Jan Wallander and Tom Hedelius Foundation, W2013-0425:1
Available from: 2016-01-13 Created: 2016-01-13 Last updated: 2016-01-18Bibliographically approved

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
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  • Other locale
More languages
Output format
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  • asciidoc
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