ICT-enabled offshoring and its impact on the international service trade with the U.S.

Abstract

This study applies the network theory and graphical modeling analysis to demonstrate how ICT- enabled offshoring transformed international services trade since the global financial crisis in 2008. Our analyses yield three observations. First, high-income countries traditionally have strong service trade links with the U.S. due to income level proximity. Second, H-1B or L-1 visas appeal to skilled labors in lower income countries and create intensive human networks, thus expanding services trade with the U.S. Third, skilled labor networks and ICT-networks have had the most direct impact on trade in services, whereas the income level proximity had less significant and indirect impact since 2009.