The Impact of offshoring services on the Egyptian Economy

This study tries to explore and examine the meaning of offshoring of services and how the imported services of offshoring will impact the Egyptian Economy, through using a literature review, and vector autoregression (VAR) model to understand the relationship between offshoring of services and the Egyptian economy using data from (1979 till 2020) the data divided to nine different variables, two of them representing the imported offshoring of services, Commercial service imports & Services imports –BoP current, and the other seven representing the Egyptian Economy, GDP current us, GDP per Capita us, GDP per Capita Growth annual, Inflation GDP Deflator, Unemployment total (ILO estimate), oil rents % of GDP, and Gross value added at Basic prices. The study of the statistical model used in this research proves that there is a strong correlation between imported offshoring of services and the Egyptian economy, specifically economic growth. Other results of this paper show also no significant impact of imported services of offshoring on employment, inflation, or the gross value added, as a result, we can build a model to measure the effect of offshoring of services on the Egyptian Economy.