SITRA The Finnish Innovation Fund
Institutional Affiliation: SITRA The Finnish Innovation Fund
NBER Working Papers and Publications
|October 2019||Service Imports, Workforce Composition, and Firm Performance: Evidence from Finnish Microdata|
with Andrea Ariu, Katariina Nilsson Hakkala, J. Bradford Jensen: w26355
This paper uses unique Finnish firm-level micro data on service imports, work- force composition, and firm characteristics to examine changes in employment composition and performance of Finnish service importers during a period of a significant increase in services imports (2002-2012). We use world service export supply shocks, which we allocate to firms based on their highly specialized service input structure, as an instrument to identify the impact of service offshoring. We find that firms that increase imports of service inputs reduce employment of low-skill service workers, increase employment of (high-skilled) managers and improve their performance in terms of sales (turnover), assets, service exports, and firm survival. The employment composition and performance responses to servic...