Year: 2008
Title:
The Effects of Offshoring on Trade in Services. Evidence from Romania
JEL: F14, F21, F23
Authors:
Agnes Ghibutiu, Senior research fellow, Institute of World Economy, Bucharest
Irina Dumitriu, Business consultant and associated professor, Academy of Economic Studies, Bucharest
Abstract:
Relying on insights from theoretical and empirical contributions on the issue of services offshoring, the paper aims to explore the effects of this phenomenon on Romania’s trade in services, by looking at its evolution during the 1995-2006 period in terms of dynamics, size and composition. Given the multiple shortcomings of statistical data and instruments available currently for tracing and measuring offshoring activities, the paper adopts a three-tier approach – i.e. based on official trade and FDI statistics, as well as additional information from private sources – to find evidence for enhanced services offshoring in the Romanian economy. The results of the empirical investigation underpin our assumption that the remarkable growth rates of exports in some individual services categories, accompanied by the positive changes under way in the patterns of Romania’s trade in services, are largely attributable to intensified offshoring activities. Even though the interpretation of the final results remains subject to caveats, the findings of the paper confirm that the large amount of anecdotal evidence on the country’s increased attractiveness for offshored services is supported by official data. An examination of Romania’s potential as location for offshored services in the European and global context is closing our discussion, followed by conclusions and some policy considerations.
Keywords:
trade in services, FDI, offshoring, Romania
Contact address: agnesghibutiu at clicknet.ro
Paper URL: http://www.styledoors.ro/ETSG-Working-Papers-Ghibutiu-Dumitriu.pdf
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