Foreign outsourcing, exporting, and FDI: a productivity comparison at the firm level

This paper documents how productivity varies with globalization modes, based on a firm-level data set covering all manufacturing industries in Japan without any firm-size threshold. Only a small fraction of firms outsource, export, or invest abroad. Foreign outsourcers and exporters tend to be less productive than the firms active in FDI or in multiple globalization modes but more productive than domestic firms. This productivity ordering is robust even when firm size, factor intensity, and/or industry are controlled for. This paper also finds that outsourcers are on average less capital intensive than other globalized firms. Keywords: Foreign outsourcing; Exporting; FDI; Heterogeneity; Firm-level data; Productivity JEL classification: F12; F23; D20; F14