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Technological diffusion, the diffusion of skill and the growth of outsourcing in US manufacturing

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Author Info
Elisabetta Magnani

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Abstract

What drives the observed rapid growth of outsourcing in US manufacturing? This article approaches this question by asking whether technological diffusion driven by R&D spillovers is in part responsible for the growth of atypical work arrangements in the USA. Relying on data of technological diffusion since the early 1970s, this study provides some evidence that technological factors may have contributed to the spread of outsourcing. When sample composition effects are accounted for, technological innovation reduces outsourcing in high-tech industries. Furthermore, this study highlights the importance of distinguishing between 'rent’ and 'pure knowledge’ spillovers. Rent spillovers are positively correlated with outsourcing, whereas pure knowledge spillovers usually decrease the incentive to outsource. Support to the technological diffusion hypothesis is also found, particularly in a sample of high-tech industries after 1980, in which rapid diffusion of IT technologies is notoriously witnessed. Alternative hypotheses are better applied to low-tech industries.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 15 (2006)
Issue (Month): 7 (October)
Pages: 617-647
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Handle: RePEc:taf:ecinnt:v:15:y:2006:i:7:p:617-647

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Related research
Keywords: Outsourcing; Technological diffusion; Firm-specific human capital; Market-mediated employment arrangements;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  5. Ann Bartel & Saul Lach & Nachum Sicherman, 2005. "Outsourcing and Technological Change," NBER Working Papers 11158, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Zvi Griliches, 1979. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 92-116, Spring. [Downloadable!] (restricted)
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  7. David H. Autor, 2000. "Outsourcing at Will: Unjust Dismissal Doctrine and the Growth of Temporary Help Employment," NBER Working Papers 7557, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Bart Los & Bart Verspagen, 2000. "R&D spillovers and productivity: Evidence from U.S. manufacturing microdata," Empirical Economics, Springer, vol. 25(1), pages 127-148. [Downloadable!] (restricted)
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  11. Zvi Griliches, 1991. "Patent Statistics as Economic Indicators: A Survey," NBER Working Papers 3301, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Segal, Lewis M & Sullivan, Daniel G, 1997. "The Growth of Temporary Services Work," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 117-36, Spring. [Downloadable!] (restricted)
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  15. Fixler, Dennis J. & Siegel, Donald, 1999. "Outsourcing and productivity growth in services," Structural Change and Economic Dynamics, Elsevier, vol. 10(2), pages 177-194, June. [Downloadable!] (restricted)
  16. Rebitzer, James B & Taylor, Lowell J, 1991. "A Model of Dual Labor Markets When Product Demand Is Uncertain," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1373-83, November. [Downloadable!] (restricted)
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Cited by:
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  1. Luigi Benfratello & Tiziano Razzolini & Alessandro Sembenelli, 2009. "Does ICT Investment Spur or Hamper Offshoring? Empirical Evidence from Microdata," Working Papers 5, University of Torino, Department of Economics and Public Finance "G. Prato". [Downloadable!]
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  2. Bartel, Ann P & Lach, Saul & Sicherman, Nachum, 2008. "Outsourcing and Technological Innovations: A Firm-Level Analysis," CEPR Discussion Papers 6731, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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