Outsourcing and Firm-level Performance
AbstractUsing firm-level panel data from the German cost structure survey over the period 1992 to 2000, our empirical analysis shows that firms that increased material inputs relative to internal labor costs performed better in terms of gross operating surplus than other firms. However, firms that increased external services relative to internal labor costs, thus outsourcing service functions previously provided within the firm, performed worse. In sum, our findings support the view that firms tend to overestimate the benefits accruing from outsourcing of services previously provided internally.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 309.
Length: 23 p.
Date of creation: 2002
Date of revision:
Outsourcing; Firm Performance; Business Service Sector.;
Other versions of this item:
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
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