Ph.d.-forsvar: Svend Greniman Andersen: Offshoring, innovation and wages

This PhD thesis consists of three self-contained chapters all centered on investigating the effects of globalization on firm- and worker-level outcomes such as innovation and wages.

In the first chapter, I look at the complementarity between production and research and development (RnD) in Danish manufacturing firms. I find that firms taking increasing advantage of offshoring of production tend to also engage in further RnD domestically. Moreover, they tend to reallocate RnD resources toward product RnD, possibly at the expense of process RnD.

The second chapter shifts focus to the labor market for top managers, or CEOs. We first construct firm complexity measures related to globalization and document novel stylized facts about globalization and CEO compensation. We then investigate whether the rise in CEO compensation can be explained by increasing firm-level globalization and find that changes in the export volume correlates with changes in CEO compensation, while firm complexity measures play a minor role. This pattern persists when conditioning on firm size. Finally, we find suggestive evidence in favor of the hypothesis that externally hired CEOs are less likely to be rewarded for exogenous changes in exports than internally hired CEOs.

The third and final chapter takes a broader view and estimates the effects of offshoring on worker wages. By constructing an occupation-specific offshoring measure using firm-level data, I can allow for occupation-wide general equilibrium effects and achieve a more precise measure of offshoring and a clear identification. I find little or no evidence of offshoring on wages, possibly reflecting relatively low mobility of workers between the manufacturing and service sectors.

All chapters rely on detailed register data on individuals, firms, RnD and trade flows, and instrumental variable strategies are employed to circumvent potential endogeneity issues.