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Frontiers of Economics in China

Front Econ Chin    2011, Vol. 6 Issue (2) : 271-289     https://doi.org/10.1007/s11459-011-0132-6
research-article
Off-Shoring and Labor Productivity: Evidence from China
Hongbo Cai1(), Xiangjun Zhang2
1. School of Economics and Business Administration, Beijing Normal University, Beijing 100875, China; 2. School of Mathematical Sciences, Beijing Normal University, Beijing 100875, China
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Abstract

This paper uses input-output tables to measure material off-shoring, service off-shoring and narrow sense material off-shoring on 33 industries by use of DJ index (Daveri and Jona-Lasinio, 2008), not FH index with “the same proportion assumption” (Feenstra and Hanson, 1996). It estimates the effects of the off-shoring on labor productivity by panel data model. Our results show that, the off-shoring is generally positively associated with labor productivity, and service off-shoring has more significant effect than the material off-shoring. There are some key aspects to be discussed in detail, including: (1) the heavy industry’s material off-shoring increases obviously and service off-shoring declines in recent years, and the former’s contribution to productivity growth is less than the latter; (2) the demand of chemical industry for service off-shoring significantly increases and its positive marginal effect on productivity growth is stronger than the material because of industry transformation and upgrading; and (3) the current intensive material off-shoring of textile, equipment manufacturing industries greatly contributes to productivity growth, while the positive effect from service off-shoring on labor productivity has initially boomed. In conclusion, we provide some suggestions for further development of China’s off-shoring.

Keywords off-shoring      material off-shoring      service off-shoring      labor      productivity      industrial sector     
Corresponding Author(s): Hongbo Cai,Email:hongbocai@bnu.edu.cn   
Issue Date: 05 June 2011
 Cite this article:   
Hongbo Cai,Xiangjun Zhang. Off-Shoring and Labor Productivity: Evidence from China[J]. Front Econ Chin, 2011, 6(2): 271-289.
 URL:  
http://journal.hep.com.cn/fec/EN/10.1007/s11459-011-0132-6
http://journal.hep.com.cn/fec/EN/Y2011/V6/I2/271
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