In this paper we show that differences in factor endowments underlie firms' decision to go offshore and we study some of the implications for the host country. Using an endogenous growth model we find that offshoring impacts factor prices and returns, while boosting the growth rate of the host economy by stimulating human and physical capital accumulation. Results show that offshoring may initially be welfare-reducing, but also point to the fact that it subsequently fosters consumption growth and alters the factor content of exports. The same feature, which is typical of the global economy era, bears important implications for the host country's current account position