Technical Report The U.S. service imports and cross-border mobility of skilled labor: Panel data analysis based on the network theory

Shinozaki, Akihiko  ,  Kubota, Shigehiro

This study aims to clarify what determines the expansion of service exports to the U.S. from both developed and developing countries with a special focus on the cross-border movement of skilled labor. For this purpose, we employed key concepts of network theory as an analytical framework and conducted a panel data analysis covering 31 countries from 1999 to 2008, the decade in which offshore outsourcing in service trade began to take off worldwide. The study used data for each country’s service exports to the U.S., domestic demand in the U.S., number of H-1B visas issued, GNI per-capita, network readiness index, and English proficiency factors. We also investigated a partial correlation matrix to analyze the effect and interactions between these factors. These analyses yield three observations. First, service trade with the U.S. is more intensive among higher income countries. Second, the number of H-1B visas issued has a positive effect on service exports to the U.S. Third, individuals in lower-income countries tend to desire H-1B visas and create intensive skilled labor networks with the U.S., the path through which developing countries such as India expanded their service exports to the U.S.
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