Andrew Bernard, Tuck at Dartmouth
Department seminar. Andrew Bernard is a Professor at Dartmouth. He will present a paper entitled "Heterogeneous Globalization: Offshoring and Reorganization", co-authored by Teresa Fort, Valerie Smeets, and Frederic Warzynski.
This paper studies how offshoring affects the composition of firms' domestic employment as well as their domestic production and innovative activities. We exploit a direct measure of offshoring and link it to firms' import and export behavior. Rather than hollowing out their domestic production, offshoring firms are likely to produce and import the same products, even after offshoring begins. A new measure of offshoring based on a firm's imports of its domestically produced goods allows the separation of imports into competing flows and those under its control. The paper exploits these differences to identify the impact of offshoring on firms' decisions to reallocate labor from production work to technology and innovation-related occupations. This reallocation of workers is accompanied by increases in offshoring firms' product development and R&D spending. Firm reorganization reveals a new channel through which offshoring affects innovation, and may ultimately affect economic performance and growth.
Host: Andreas Moxnes