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Cross-border sourcing and outward processing in EU manufacturing


Egger, H; Egger, P (2001). Cross-border sourcing and outward processing in EU manufacturing. North American Journal of Economics and Finance, 12(3):243-256.

Abstract

With the help of a standard 2 × 2 trade model, we develop several hypotheses on the effects of cross-border sourcing on skill intensity in production. The focus is on cross-border sourcing of low-skill-intensive components of exports and import-competing products. We test the aforementioned hypotheses with panel data for manufacturing in the European Union (EU). We find that outward processing is more prevalent in import-competing industries, which are also the EU’s relatively intensive users of low-skilled labor. Outward processing in export industries is found to reduce the skill-to-low-skill ratio in EU industries, while outward processing in import-competing industries has more ambiguous effects.

Abstract

With the help of a standard 2 × 2 trade model, we develop several hypotheses on the effects of cross-border sourcing on skill intensity in production. The focus is on cross-border sourcing of low-skill-intensive components of exports and import-competing products. We test the aforementioned hypotheses with panel data for manufacturing in the European Union (EU). We find that outward processing is more prevalent in import-competing industries, which are also the EU’s relatively intensive users of low-skilled labor. Outward processing in export industries is found to reduce the skill-to-low-skill ratio in EU industries, while outward processing in import-competing industries has more ambiguous effects.

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Additional indexing

Other titles:Cross border outsourcing: A general equilibrium perspective and evidence for outward processing in EU manufacturing
Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:2001
Deposited On:06 May 2008 12:27
Last Modified:21 Nov 2017 13:26
Publisher:Elsevier
ISSN:1062-9408
Publisher DOI:https://doi.org/10.1016/S1062-9408(01)00054-7

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