fraction of production by services sectors. We develop a multisector growth model that admits structural change in production …

The study proves evidence of five new empirical facts on the impact of services offshoring on local labour markets …. First, services offshoring increases average employment and wages within local labour markets, much more so in the … manufacturing industry than in the services one. Second, positive effects are both on firms directly offshoring services and on non …

arm’s length. The model further implies that firms are more likely to offshore when frictions in the provision of services …