Over the last decades, productivity in the tradable sector rose substantially, while in the non-tradable sector, output … duality in higher education as well as heterogeneous ability of individuals can explain the differences in labor productivity … can explain that despite an increase in human capital in both sectors, there is still a gap in productivity. In other …

The paper answers two questions simultaneously. What is the effect of offshoring on firms' total factor productivity … for the effect of offshoring on both total factor productivity and relative skilled labor productivity, and for spillovers … intensity on total factor productivity, particularly of small domestic firms and large foreign-owned firms, and on skill …