Home | CV | Courses Job Market Paper: "Offshoring, Wages, and Employment: Theory and Evidence" Sethupathy (2008) Abstract: This paper combines theory and empirics to investigate the wage and employment effects of offshoring. The theoretical framework combines heterogeneous firms with wage bargaining, in which firms endogenously select into offshoring. Following a new offshoring opportunity, offshoring firms increase their productivity and profitability at the expense of non-offshoring firms. This channel leads to higher domestic wages at offshoring firms and lower domestic wages at non-offshoring firms. Further, the predicted effect on domestic employment is ambiguous at the former but negative at the latter. Using two events in Mexico as exogenous shocks to the marginal cost of offshoring to Mexico, I test these implications with firm-level data on US multinationals. The empirical findings support the prediction on wages and find no evidence of greater job loss at offshoring firms relative to non-offshoring firms.
Working Paper:"Does Exporting Lead to Spillovers in Horizontal or Vertical Industries? Evidence from Indonesia" Sethupathy (2008)
Abstract: There is some evidence that exporting leads to increased firm productivity in developing economies as new exporters learn technologies, best business practices, and face intense foreign competition. This paper investigates whether these productivity improvements spillover domestically to upstream suppliers, downstream customers, or horizontal competitors. This paper finds that productivity spillovers are present to downstream firms. One potential mechanism could be that exporting firms, upon improving their own productivity, supply a higher quality input to downstream firms, thereby enabling downstream firms to improve their own productivity. “Power Balance and Congressional Apportionment Algorithms” (The ACM Journal of Experimental Algorithms, Vol.3, 1998) | 
