'The aim of this paper is to investigate the effect of foreign outsourcing, particularly to Central and Eastern European (CEE) countries, on the level of employment in Spain. Outsourcing is calculated using domestic and import-use matrices of input–output tables for 92 Spanish manufacturing industries, and data on imports from the National Customs Agency. These data are included in a labour demand function estimated using dynamic panel data techniques. We find that the effect of outsourcing differs according to industry characteristics and the country of origin. Its effect on labour is negative and significant for medium–high-tech industries when outsourcing comes from CEE countries and new candidates while it is non-significant for other countries and low-tech sectors.'

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