Outsourcing and Structural Change: What Can Input-Output Analysis Say About It?

Abstract

Outsourcing and Structural Change. What Can Input-Output Analysis Say About It? The paper aims at investigating the capacity of input-output analysis to identify the structural change implications of outsourcing. In particular, it develops the idea that outsourcing leaves «traces» in the intersectoral structure of one economy that can be caught empirically, to a different extent by different indicators. The pros and cons of these indicators are discussed from a methodological point of view and their actual interpretative power shown through an application to the OECD area for the ’80s and the early ’90s. The main result of the paper is that an accurate mapping of the relationship between outsourcing and structural change requires us to use different indicators jointly, rather than alternatively. In particular, a purely sectoral kind of perspective needs to be combined with a subsystem one, which detects the effects of outsourcing on the vertical integration degree of one economy’s sectors.

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