We extend the small country trade model with firm heterogeneity (Demidova and Rodriguez-Clare, Journal of International Economics, 90, 2013 and 266) to incorporate offshoring (along with final goods trade). We derive the firm-level employment implications of output and input trade and trade costs and test them using Korean firm-level data for the period 2006–2016. A key theoretical result is that the impact of a change in offshoring cost on employment depends crucially on the net substitutability between inputs where net substitutability is the difference between the elasticities of input substitution and output substitution. Empirically, we find that a decrease in the input trade cost reduces employment and the impact is stronger, the greater the net substitutability between inputs. Our 2SLS results with firm-level imports (in place of trade costs) are consistent with our results with trade costs.

中文翻译：

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国际贸易和就业：来自韩国公司的理论和证据

我们扩展了具有企业异质性的小国贸易模型（Demidova 和 Rodriguez-Clare，Journal of International Economics，90、2013 和 266）将离岸外包（以及最终商品贸易）纳入其中。我们推导出产出和投入贸易以及贸易成本对企业层面的就业影响，并使用 2006 年至 2016 年期间韩国企业层面的数据对其进行测试。一个关键的理论结果是，离岸成本变化对就业的影响主要取决于投入之间的净替代性，其中净替代性是投入替代和产出替代弹性之间的差异。根据经验，我们发现投入品贸易成本的降低会减少就业，而且投入品之间的净替代性越大，影响越大。