Offshoring white collar jobs and structural change in host economies: the regional dimension

ABSTRACT

The main objective of this paper is to investigate the extent to which inward foreign direct investment (FDI) in advanced business services (ABS) – a result of so-called offshoring of white collar jobs – contributes to the structural change of employment in regions of host economies. We use a fixed-effect regression model based on cross-regional panel data for Hungary and Poland for the period between 2005 and 2014. Our findings show that ABS FDI carries structural impacts: employment in foreign-owned firms increases the share of the tertiary sector in a region both directly and indirectly through inducing other tertiary activities as well.

KEYWORDS:

• Offshoring
• foreign direct investment
• advanced business services
• regions
• central and eastern europe

Acknowledgments

Earlier versions of the paper were presented at the ETSG 2018 Conference in Warsaw, a Research Seminar at the Hungarian Academy of Sciences in Budapest on 19 December 2018, and at the AEEFI 2019 Conference in Granada.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the National Science Centre, Poland under Grant no. DEC-2015/19/B/HS4/00356.