Domestic Effects of Offshoring High-skilled Jobs: Complementarities in Knowledge Production

Laura Abramovsky, Rachel Griffith, Helen Miller

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Abstract

We provide evidence on how changes in the use of high-skilled workers (inventors) in a foreign location affect a firm's domestic use of the same type of worker. We exploit rich data that provide variation in the location of inventors within multinational firms across industries and countries to control for confounding firm–time and industry factors. We find that a 10% increase in the use of foreign inventors leads to a 1.9% increase in the use of domestic inventors. Our results suggest that foreign and domestic inventors are complementary in the production of knowledge.
Original languageEnglish
JournalReview of International Economics
Volume25
Issue number1
Early online date19 Jun 2016
DOIs
Publication statusPublished - 2017

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