Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81504
Authors: 
Heyman, Fredrik
Gustavsson Tingvall, Patrik
Year of Publication: 
2012
Series/Report no.: 
IFN Working Paper 919
Abstract: 
Previous research has recognized that weak institutions can hamper investments and alter patterns of trade. However, little is known about the impact of institutional quality on offshoring. This is surprising, given that offshoring has become an important part of many firmsÂ’ internationalization strategy. This study uses detailed Swedish firm-level data on production and trade in combination with a large set of institutional measures of the target economies to study the relationship between institutional quality and offshoring. The results suggest that weak institutions are negatively related to offshoring in general and to offshoring of R&D-intensive goods in particular. Furthermore, firms that are able to establish long-term contracts do so by starting small and successively deepening their engagements. These results are robust to a large number of econometric specifications and various measures of institutional quality.
Subjects: 
Offshoring
Institutional quality
Firm-level data
JEL: 
F14
F23
P48
Document Type: 
Working Paper

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