Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/37475
Authors: 
Debaere, Peter
Görg, Holger
Raff, Horst
Year of Publication: 
2010
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Offshoring: Causes and Consequences F3-V3
Abstract: 
We use unique plant-level data to study the link between the local availability of services and the decision of manufacturing firms to source materials from abroad. To guide our empirical analysis we develop a monopolistic-competition model of the materials sourcing decisions of heterogeneous firms. The model generates predictions about how the intensity of international sourcing of materials depends on a firm's productivity and the availability of local services. These predictions are supported by the data. We find evidence that more productive manufacturing firms tend to have a higher ratio of imported materials to sales. In addition, we find evidence that services grease the wheels of international commerce: A greater availability of services across regions, industries and time increases a firm's foreign sourcing of materials relative to sales. Interestingly, this positive impact of local service availability on imports especially applies to stand-alone firms that, unlike multinationals, are less likely to rely on imported or internally provided services.
Subjects: 
international trade
services
off-shoring
supply chain management
firm heterogeneity
JEL: 
F12
L23
F10
Document Type: 
Conference Paper

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