Regional production networks,service offshoring,and productivity in East Asia |
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Authors: | Moonsung Kang Hyuk Hwang Kim Hongshik Lee Joonhyung Lee |
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Institution: | 1. Korea University, Republic of Korea;2. KIEP, Republic of Korea;3. University of Texas, Austin, United States |
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Abstract: | Using the Asian International Input–Output Table (1990, 1995, and 2000), this paper explores regional production networks and offshoring of material and service inputs in East Asia. In doing so, offshoring is measured directly from the Table, which has not been used in previous literature regarding this issue. It turns out that East Asian countries source significant shares of inputs within East Asia. In addition to material offshoring, service offshoring in East Asia has become increasingly common in the era of globalization. We also evaluate the effects of this fast growing offshoring on productivity. Our econometric results demonstrate that offshoring exerts a significant and positive impact on total factor productivity in East Asia. Service offshoring, in particular, performs a more significant role than material offshoring. |
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