Table 4.
Immigration and Firm Offshoring, Mechanisms
Share of Non-EU at Offshoring Firms (Firm-Level)Share of Non-EU at Non-Offshoring Firms (Firm-Level)Share of Routine Occ. at Offshoring Firms (Firm-Level)Share of Routine Occ. at Non-Offshoring Firms (Firm-Level)Avg. Native Wage (Mun.-Level)Avg. Non-EU Wage (Mun.-Level)Wages (Worker-Level)Productivity (Mun.-Level)Stock of Firms (Mun.-Level)Inflow of Firms (Mun.-Level)
(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)
Non-EU Immigrant Share$t-1$ 0.317** 0.105** 2.690** 0.250 −6.077 −2.859***  0.552 3.938* 8.409*
(0.142) (0.048) (1.325) (0.553) (3.922) (0.485)  (0.459) (2.184) (4.465)
Non-EU Immigrant$t$       −0.072***
(0.001)
Municipality and Year Fixed Effects yes yes yes yes yes yes yes yes yes yes
Municipality Averages of All the Other Control Variables no no no no yes yes no yes yes yes
Industry, Firm, Occupation, and Gender Fixed Effects no no no no no no yes no no no
Age and Education Variables no no no no no no yes no no no
Firm and Industry Fixed Effects yes yes yes yes no no no no no no
Firm Size Dummies and Multi-establishment Dummy yes yes yes yes no no no no no no
Workforce Characteristics yes yes yes yes no no no no no no
Mean $Y$ 0.039 0.017 0.309 0.356 5.315 5.133 5.080 14.359 5.697 4.154
First Stage: KP $F$-statistic on Instrument 14.292 11.273 14.292 11.273 31.273 31.273 — 31.273 31.273 31.273
First Stage: Non-EU Img IV Coeff. 0.238*** (0.069) 0.156*** (0.051) 0.238*** (0.069) 0.156*** (0.051) 0.122*** (0.022) 0.122*** (0.022) — 0.122*** (0.022) 0.122*** (0.022) 0.122*** (0.022)
$R2$ 0.774 0.845 0.763 0.805 0.802 0.856 0.456 0.854 0.884 0.848
$N$ 99,063 339,895 99,063 339,895 1,552 1,552 16,283,602 1,552 1,552 1,552
Share of Non-EU at Offshoring Firms (Firm-Level)Share of Non-EU at Non-Offshoring Firms (Firm-Level)Share of Routine Occ. at Offshoring Firms (Firm-Level)Share of Routine Occ. at Non-Offshoring Firms (Firm-Level)Avg. Native Wage (Mun.-Level)Avg. Non-EU Wage (Mun.-Level)Wages (Worker-Level)Productivity (Mun.-Level)Stock of Firms (Mun.-Level)Inflow of Firms (Mun.-Level)
(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)
Non-EU Immigrant Share$t-1$ 0.317** 0.105** 2.690** 0.250 −6.077 −2.859***  0.552 3.938* 8.409*
(0.142) (0.048) (1.325) (0.553) (3.922) (0.485)  (0.459) (2.184) (4.465)
Non-EU Immigrant$t$       −0.072***
(0.001)
Municipality and Year Fixed Effects yes yes yes yes yes yes yes yes yes yes
Municipality Averages of All the Other Control Variables no no no no yes yes no yes yes yes
Industry, Firm, Occupation, and Gender Fixed Effects no no no no no no yes no no no
Age and Education Variables no no no no no no yes no no no
Firm and Industry Fixed Effects yes yes yes yes no no no no no no
Firm Size Dummies and Multi-establishment Dummy yes yes yes yes no no no no no no
Workforce Characteristics yes yes yes yes no no no no no no
Mean $Y$ 0.039 0.017 0.309 0.356 5.315 5.133 5.080 14.359 5.697 4.154
First Stage: KP $F$-statistic on Instrument 14.292 11.273 14.292 11.273 31.273 31.273 — 31.273 31.273 31.273
First Stage: Non-EU Img IV Coeff. 0.238*** (0.069) 0.156*** (0.051) 0.238*** (0.069) 0.156*** (0.051) 0.122*** (0.022) 0.122*** (0.022) — 0.122*** (0.022) 0.122*** (0.022) 0.122*** (0.022)
$R2$ 0.774 0.845 0.763 0.805 0.802 0.856 0.456 0.854 0.884 0.848
$N$ 99,063 339,895 99,063 339,895 1,552 1,552 16,283,602 1,552 1,552 1,552

In columns 1 and 2, the dependent variable is the firm-level share of non-EU workers at time $t$. In columns 3 and 4, the dependent variable is the share of workers who are employed in routine occupations at the firm level at time $t$. An occupation is classified as routine intensive if the principal component index of manual dexterity (O*NET task id 1.A.2.a.2), finger dexterity (1.A.2.a.3), multilimb coordination (1.A.2.b.2), processing information (4.A.2.a.2), and evaluating information to determine compliance with standards (4.A.2.a.3) is above the 75th percentile of the index distribution. In columns 1 and 3, the sample includes only firms that offshore for at least one year over the sample period. In columns 2 and 4, the sample includes all the other firms. In column 5 (6), the dependent variable is the natural log of the average hourly wages of native (non-EU) workers at the municipality level at time $t$. In column 7, the dependent variable is the log of hourly wages at the worker level, and the independent variable is a binary variable indicating whether the worker is a non-EU immigrant. In column 8, the dependent variable is the average firm productivity at the municipality level at time $t$. In column 9, the dependent variable is the natural log of the stock of firms in a given municipality at time $t$. In column 10, the dependent variable is the natural log of existing firms moving into a given municipality at time $t$. The municipality averages of all the other control variables are included (labor productivity, capital stock, foreign-ownership, a multiestablishment dummy, size dummies, male, age, work experience, tenure, and years of education). Municipality regressions are weighted by the local labor force at time $t$. Robust standard errors in parentheses in all columns and clustered at the firm (worker) level in columns 1, 2, 3, and 4 (7). Significance levels: ***1%, **5%, and *10%.

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