Does offshore outsourcing impact home employment? Evidence from service multinationals

Nigel Driffield, Vijay Pereira, Yama Temouri

Research output: Contribution to journalArticle

Abstract

This paper investigates the impact of offshore outsourcing across 5746 European service multinational enterprises (MNEs) on employment at home. We estimate labour demand equations and specifically isolate the global financial crisis (GFC) by undertaking analysis through our longitudinal 19-year panel data, separately for the pre- (1997–2007) and crisis period (2008–2016). We distinguish between offshoring to high and low income countries, as well as between service industry groups. We show that there is some evidence that offshoring by location intensive service firms is associated with employment growth at home during the crisis period, while offshoring in information intensive industries in high income countries is associated with a reduction in employment at home, as firms offshore to be nearer to the client. Overall, our findings suggest that the crisis period has lessened the impact of offshoring service FDI on employment at home.
Original languageEnglish
Pages (from-to)448-459
Number of pages12
JournalJournal of Business Research
Volume103
Early online date21 Oct 2017
DOIs
Publication statusPublished - 1 Oct 2019

Bibliographical note

© 2017, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
http://creativecommons.org/licenses/by-nc-nd/4.0/.

Keywords

  • Employment growth
  • FDI
  • OLI paradigm
  • Offshoring
  • Relocation
  • Service sector

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