Offshoring and skill-upgrading in French manufacturing: A Heckscher-Ohlin-Melitz view

Juan Carluccio, Alejandro Cunat, Harald Fadinger, Christian Fons-Rosen

Publications: Working paper


We present a factor-proportions trade model in which heterogeneous firms can offshore intermediate inputs subject to fixed offshoring costs. In the skill-abundant country, high-productivity firms offshore a larger range of labor-intensive inputs to the labor-abundant countries than low-productivity firms. Differently from the traditional versions of factor-proportions trade theory, Heckscher-Ohlin forces operate at the within-industry level, leading
to endogenous variation in skill intensity across firms that is positively correlated with firm productivity. Using French firm-level data for the years 1996 to 2007, we provide empirical support for the factor proportions channel through which offshoring to labor-abundant countries affects the firm-level skill intensities of French manufacturers.
Original languageEnglish
Number of pages54
Publication statusPublished - Oct 2015

Publication series

SeriesCEPR Discussion Paper Series

Austrian Fields of Science 2012

  • 502013 Industrial economics
  • 502003 Foreign trade


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