Discussion paper

DP14485 Heterogeneous Globalization: Offshoring and Reorganization

This paper exploits a unique offshoring survey to show that firms continue domestic production of the same goods they offshore to low-wage countries. This shift towards ``produced-good imports" coincides with a reallocation of labor from physical production to innovation and technology occupations, and an increase in domestically produced varieties' unit values. These responses suggest an additional, firm-level benefit of trade liberalization: the opportunity to offshore production of low-quality varieties, thereby freeing up resources for the development, production, and marketing of higher-quality varieties. Firms’ reactions also motivate a new offshoring measure – produced-good imports – that is readily observed in most firm-level datasets.


Bernard, A, T Fort, V Smeets and F Warzynski (2020), ‘DP14485 Heterogeneous Globalization: Offshoring and Reorganization‘, CEPR Discussion Paper No. 14485. CEPR Press, Paris & London. https://cepr.org/publications/dp14485