Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123170
Authors: 
Carluccio, Juan
Cuñat, Alejandro
Fadinger, Harald
Fons-Rosen, Christian
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5549
Abstract: 
We present a factor-proportions trade model in which heterogeneous firms can offshore intermediate inputs subject to fixed offshoring costs. In the skill-abundant country, high-productivity firms offshore a larger range of labor-intensive inputs to the labor-abundant countries than low-productivity firms. Differently from the traditional versions of factor-proportions trade theory, Heckscher-Ohlin forces operate at the within-industry level, leading to endogenous variation in skill intensity across firms that is positively correlated with firm productivity. Using French firm-level data for the years 1996 to 2007, we provide empirical support for the factor proportions channel through which offshoring to labor-abundant countries affects the firm-level skill intensities of French manufacturers.
Subjects: 
offshoring
heterogeneous firms
firm-level factor intensities
Heckscher-Ohlin
JEL: 
F11
F12
F14
Document Type: 
Working Paper

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