Premium
Offshoring in the New Global Political Economy
Author(s) -
Levy David L.
Publication year - 2005
Publication title -
journal of management studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.398
H-Index - 184
eISSN - 1467-6486
pISSN - 0022-2380
DOI - 10.1111/j.1467-6486.2005.00514.x
Subject(s) - offshoring , commodity , shareholder value , phenomenon , value (mathematics) , politics , outsourcing , balance (ability) , shareholder , business , economics , labour economics , production (economics) , power (physics) , market economy , corporate governance , microeconomics , finance , marketing , medicine , physics , quantum mechanics , machine learning , computer science , political science , law , physical medicine and rehabilitation
This essay challenges claims by economists and management scholars that ‘offshoring’ is simply another form of trade with mutual benefits. I argue that reducing wages through offshoring leads to wealth creation for shareholders but not necessarily for countries and employees, and that many displaced workers have difficulty ‘trading up’ to higher skilled jobs. Offshoring is a new phenomenon that entails the organizational and technological ability to relocate specific tasks and coordinate a geographically dispersed network of activities. It decouples the linkages between economic value creation and geographic location. The result is the creation of global commodity markets for particular skills and a shift in the balance of market power among firms, workers, and countries.