Service Offshoring and Productivity: Evidence from the United States

Mary Amiti, Shang-Jin Wei

NBER Working Paper No. 11926
Issued in January 2006, Revised in April 2007
NBER Program(s):International Trade and Investment, Productivity, Innovation, and Entrepreneurship

The practice of sourcing service inputs from overseas suppliers has been growing in response to new technologies that have made it possible to trade in some business and computing services that were previously considered non-tradable. This paper estimates the effects of offshoring on productivity in US manufacturing industries between 1992 and 2000. It finds that service offshoring has a significant positive effect on productivity in the US, accounting for around 10 percent of labor productivity growth during this period. Offshoring material inputs also has a positive effect on productivity, but the magnitude is smaller accounting for approximately 5 percent of productivity growth.

A non-technical summary of this paper is available in the March 2006 NBER Digest.  You can sign up to receive the NBER Digest by email.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w11926

Published:

• Mary Amiti & Shang-Jin Wei, 2009. "Service Offshoring and Productivity: Evidence from the US," The World Economy, Blackwell Publishing, vol. 32(2), pages 203-220, 02.
• Mary Amiti & Shang-Jin Wei, 2005. "Service offshoring, Productivity, and Employment: Evidence From the United States," IMF Working Papers, vol 05(238).

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