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 Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 90.
Date of creation: 04 Jun 2003
Date of revision:
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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
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-06-16 (All new papers)
- NEP-EFF-2003-07-29 (Efficiency & Productivity)
- NEP-ENT-2003-06-16 (Entrepreneurship)
- NEP-IND-2003-06-16 (Industrial Organization)
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