This paper explores the impact of offshoring, or contracting out of business activities to foreign providers, on firm productivity, using Japanese firm-level data for the period 1994-2000. We find that offshoring has generally a positive effect on productivity growth. This effect is robust to...

Myriad hypotheses have been advanced to explain the dismal performance of the post-1990 Japanese economy. In this paper we use plant and firm data to investigate the issue. The low rate of productivity growth in Japan is also often seen as a product of Japanese MNEs offshoring production and...