Are multinationals exporting jobs? The case of Taiwan

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Does offshore production always result in jobexpor tation? Using firmlevel data for Taiwanese multinationals that allow us to avoid reverse causality issues, this research finds that while increasing offshore production has a negative impact on the demand for domestic manufacturing workers, this is not the case for domestic R&D workers, who are often moreskilled. The empirical study also suggests that for Taiwan, there is a geographical fragmentation of distinct production activities in a way that more skilled jobs are kept domestically, and less skilled jobs are exporting to other developing countries. These findings confirm the prediction of the knowledge capital model presented by Markusen et al. (1996) and Markusen (1997).