Offshoring and Wage Inequality
Theory and Evidence from China
Bibliographic Data
| ID | 4361092 |
|---|---|
| Authors | Liugang Sheng (0000-0002-2470-6951, Chinese University of Hong Kong), Dennis Tao Yang (Chinese University of Hong Kong) |
| Year | 2025 |
| Volume | 73 |
| Issue | 4 |
| Pages | 000-000 |
| Publication date | 2025-05-29 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Economic Development and Cultural Change (JOURNAL) |
| Journal identifiers | ISSN: 0013-0079 • E-ISSN: 1539-2988 |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/733926 |
| OpenAlex | W4404177656 |
| Language | EN |
| References cited | 48 |
We present a global production sharing model that integrates the organizational choices of offshoring into the determination of relative wages in developing countries, highlighting that offshoring through foreign direct investment raises the demand for skill in the South more than arm’s length outsourcing. By leveraging the natural experiment in which China lifted its restrictions on foreign ownership for multinationals upon its accession to the World Trade Organization in 2001, we show that the significant shifts in firm ownership structure in offshoring promote skill upgrading in Chinese processing exports and the relative wage of skilled workers in China’s manufacturing sector from 1992 to 2008
Business · China · Economics · Inequality · Labour economics · Offshoring · Outsourcing · Political science · Wage · Wage Inequality · Corporate Finance and Governance · Global trade and economics · Outsourcing and Supply Chain Management
Factor Proportions and the Structure of Commodity Trade
Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade
Foreign direct investment and relative wages
Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality
The Surprisingly Swift Decline of US Manufacturing Employment
Outsourcing in a Global Economy
Identifying FDI spillovers
The Wage Effects of Offshoring
Capital-skill Complementarity and Inequality
The Impact of Outsourcing and High-Technology Capital on Wages
Infrastructure, Geographical Disadvantage, Transport Costs, and Trade
Trade Liberalization and Embedded Institutional Reform
Accounting for intermediates
Firms, Contracts, and Trade Structure
Trade, Migration, and Productivity
Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages
Distributional Effects of Globalization in Developing Countries
Adaptation and the Boundary of Multinational Firms
The Log of Gravity
Global supply chains, firm scope and vertical integration
Foreign Direct Investment and Wage Inequality
The economic impact of Special Economic Zones
Expanding export variety
Property Rights and the Nature of the Firm
Global Sourcing
The Costs and Benefits of Ownership
Testing the bargaining hypothesis in the manufacturing sector in developing countries
The Great Proletarian Cultural Revolution, Disruptions to Education, and the Returns to Schooling in Urban China
| Highly cited | No |
|---|