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Are multinationals exporting jobs? The case of Taiwan
Author(s) -
Chen YenHeng Henry
Publication year - 2011
Publication title -
asian‐pacific economic literature
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.232
H-Index - 21
eISSN - 1467-8411
pISSN - 0818-9935
DOI - 10.1111/j.1467-8411.2011.01305.x
Subject(s) - exportation , business , production (economics) , fragmentation (computing) , developing country , labour economics , capital (architecture) , causality (physics) , industrial organization , economics , economic growth , geography , physics , geometry , mathematics , archaeology , quantum mechanics , computer science , macroeconomics , operating system
Does offshore production always result in job exportation? Using firm‐level data for Taiwanese multinationals that allow us to avoid reverse causality issues, this paper finds that while increasing offshore production has a negative impact on the demand for domestic manufacturing workers, this is not the case for domestic research and development workers who are often more skilled. The results also suggest that for Taiwan, there is geographical fragmentation of production activities in such a way that more skilled jobs are maintained domestically and less‐skilled jobs are exported to other developing countries. These findings confirm the prediction of the knowledge‐capital model.