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Why do some firms contract out production? Evidence from firm-level panel data

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  • C. Díaz-Mora
  • A. Triguero-Cano

Abstract

This article examines which factors determine outsourcing decision using firm level data. According to the theoretical and empirical literature, firm, industry and market characteristics influence the likelihood of contracting out. We try to identify which firm characteristics are prerequisites for becoming an outsourcer. Using a dynamic panel data probit model, our results show that firms with previous subcontracting experience, higher wages, frequent market changes, R&D activities, product differentiation, large size and exporter status are more likely to engage in outsourcing.

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File URL: http://hdl.handle.net/10.1080/00036846.2010.548787
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 44 (2012)
Issue (Month): 13 (May)
Pages: 1631-1644

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Handle: RePEc:taf:applec:44:y:2012:i:13:p:1631-1644

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Cited by:
  1. Keuschnigg, Christian & Ribi, Evelyn, 2007. "Outsourcing, Unemployment and Welfare Policy," CEPR Discussion Papers 6605, C.E.P.R. Discussion Papers.
  2. Angels Pelegrín & José García-Quevedo, 2012. "Which firms are involved in foreign vertical integration?," Working Papers 2012/38, Institut d'Economia de Barcelona (IEB).
  3. Manuel Artís & Raul Ramos & Jordi Suriñach, 2006. "Job losses, outsourcing and relocation: Empirical evidence using microdata," Working Papers CREAP2006-05, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2006.
  4. Linares Navarro, E. & Pla Barber, J. & Puig Blanco, F, 2009. "La Estrategia De Outsourcing Internacional En España: Una Aproximación A Los Sectores Manufactureros Tradicionales / The Strategy Of International Outsourcing In Spain: An Approximation To The Tradi," Investigaciones Europeas de Dirección y Economía de la Empresa (IEDEE), Academia Europea de Dirección y Economía de la Empresa (AEDEM), vol. 15(3), pages 55-67.

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