Does offshore outsourcing impact home employment? Evidence from service multinationals

Nigel Driffield, Vijay Edward Pereira, Yama Temouri

    Research output: Contribution to journalArticlepeer-review

    13 Scopus citations


    This paper investigates the impact of offshore outsourcing across 5746 European service multinational enterprises (MNEs) on employment at home. We estimate labour demand equations and specifically isolate the global financial crisis (GFC) by undertaking analysis through our longitudinal 19-year panel data, separately for the pre- (1997–2007) and crisis period (2008–2016). We distinguish between offshoring to high and low income countries, as well as between service industry groups. We show that there is some evidence that offshoring by location intensive service firms is associated with employment growth at home during the crisis period, while offshoring in information intensive industries in high income countries is associated with a reduction in employment at home, as firms offshore to be nearer to the client. Overall, our findings suggest that the crisis period has lessened the impact of offshoring service FDI on employment at home.

    Original languageBritish English
    Pages (from-to)448-459
    Number of pages12
    JournalJournal of Business Research
    StatePublished - Oct 2019


    • Employment growth
    • FDI
    • Offshoring
    • OLI paradigm
    • Relocation
    • Service sector


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