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Production Subcontracting and Location

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  • Adelheid Holl

Abstract

Using data from a panel of Spanish manufacturing firms, I examine factors that explain firms’ production subcontracting decisions and test whether there is any evidence that production subcontracting is facilitated in areas typically associated with higher agglomeration economies. The results show that location matters. Firms in industry agglomerations are more likely to subcontract production activities. While in general, larger and older firms as well as high wage firms show a greater probability for production subcontracting, industry agglomeration particularly facilitates subcontracting for smaller and lower wage firms and it allows firms to respond to a greater degree to expansive demand conditions by taking advantage of subcontracting.

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Paper provided by FEDEA in its series Working Papers with number 2007-17.

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Date of creation: Jun 2007
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Handle: RePEc:fda:fdaddt:2007-17

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Citations

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Cited by:
  1. Carmen Díaz Mora, . "DETERMINANTS OF OUTSOURCING PRODUCTION: A Dynamic Panel Data Approach for Manufacturing Industries," Working Papers on International Economics and Finance 05-07, FEDEA.
  2. Artís, Manuel & Ramos, Raul & Surinach, Jordi, 2007. "Job Losses, Outsourcing and Relocation: Empirical Evidence Using Microdata," IZA Discussion Papers 2978, Institute for the Study of Labor (IZA).
  3. Isabel Diez-Vial & Emilio Alvarez-Suescun, 2010. "Geographical Agglomeration as an Alternative to Vertical Integration," Review of Industrial Organization, Springer, vol. 36(4), pages 373-389, June.
  4. Mukim, Megha, 2013. "Coagglomeration of formal and informal industry : evidence from India," Policy Research Working Paper Series 6622, The World Bank.
  5. Andrea F. Presbitero & Matteo G. Richiardi & Alessia Amighini, 2012. "Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing," LABORatorio R. Revelli Working Papers Series 122, LABORatorio R. Revelli, Centre for Employment Studies.
  6. Angels Pelegrín & Catalina Bolancé, 2011. "Offshoring and company characteristics: some evidence from the analysis of Spanish firm data," Working Papers 2011/16, Institut d'Economia de Barcelona (IEB).
  7. 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.
  8. Koskela, Erkki & König, Jan, 2011. "The Role of Profit Sharing in Dual Labour Markets with Flexible Outsourcing," IZA Discussion Papers 5798, Institute for the Study of Labor (IZA).
  9. Roberto Antonietti, 2014. "From Outsourcing to Productivity, Passing Through Training: Microeconometric Evidence from Italy," Working Papers 2014.12, Fondazione Eni Enrico Mattei.
  10. Drauz, Ralf, 2014. "Re-insourcing as a manufacturing-strategic option during a crisis—Cases from the automobile industry," Journal of Business Research, Elsevier, vol. 67(3), pages 346-353.
  11. 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.
  12. Roberto Antonietti & Maria Rosaria Ferrante & Riccardo Leoncini, 2014. "Trust your neighbour. Industrial relatedness, social capital and outsourcing," Papers in Evolutionary Economic Geography (PEEG) 1403, Utrecht University, Section of Economic Geography, revised Jan 2014.
  13. Octávio Figueiredo & Paulo Guimarães & Douglas Woodward, 2008. "Vertical Disintegration in Marshallian Industrial Districts," FEP Working Papers 280, Universidade do Porto, Faculdade de Economia do Porto.
  14. Liza Jabbour, . "Market Thickness, Sunk Entry Costs, Firm Heterogeneity and the Outsourcing Decision: Empirical Evidence of Manufacturing Firms in France," Discussion Papers 08/20, University of Nottingham, GEP.

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