Arbeitspapier

Service Offshoring and Export Experience

Service inputs are a key component of the costs of exporting, and contribute to explain the process of internationalization of firms. A new dataset on the participation of French firms in global value chains reveals that firms with longer export experience in a market are more likely to source service inputs from there. We rationalize this fact in a model where firms are initially uncertain about how successful they are as exporters, but learn their export profitability as they keep selling abroad. Because offshoring requires larger sunk costs than domestic sourcing, some firms decide to offshore only when they become sufficiently confident about their export prospects, i.e., once they acquire enough export experience. More export experience in a foreign destination also induces firms to offshore within the boundaries of the firm rather than at arm’s length. The model further implies that firms are more likely to offshore when frictions in the provision of services between the domestic and the foreign market are greater. In turn, offshoring firms sell greater volumes, display less volatility, and are less likely to exit foreign markets. Exploiting our novel dataset, we provide strong empirical support for each of these predictions.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 9126

Klassifikation
Wirtschaft
Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Empirical Studies of Trade
Multinational Firms; International Business
Firm Organization and Market Structure
Organization of Production
Personal, Professional, and Business Services
Thema
export dynamics
commercial presence
global sourcing
services
firm boundaries

Ereignis
Geistige Schöpfung
(wer)
Berlingieri, Giuseppe
Marcolin, Luca
Ornelas, Emanuel
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and Ifo Institute (CESifo)
(wo)
Munich
(wann)
2021

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Berlingieri, Giuseppe
  • Marcolin, Luca
  • Ornelas, Emanuel
  • Center for Economic Studies and Ifo Institute (CESifo)

Entstanden

  • 2021

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