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Outsourcing and offshoring of business services: how important is ICT?

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  • Laura Abramovsky

    ()
    (Institute for Fiscal Studies)

  • Rachel Griffith

    ()
    (Institute for Fiscal Studies and University of Manchester)

Abstract

This paper considers the impact that technology has on firms' choices over organisational form, in particular whether to produce inhouse or outsource and offshore services, and firms' decision over the location of activity. Technology reduces the transaction and adjustment costs of moving activity outside the firm and of carrying out at greater geographic distance. We find that more technology intensive firms purchase a greater amount of services on the market and purchase more offshore than less technologically intensive firms.

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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W05/22.

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Length: 16 pp.
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:ifs:ifsewp:05/22

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Keywords: Outsourcing; offshoring; ICT; business services;

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  1. Marin, Dalia & Verdier, Thierry, 2002. "Globalization and the 'New Enterprise'," CEPR Discussion Papers 3640, C.E.P.R. Discussion Papers.
  2. Marin, Dalia & Verdier, Thierry, 2006. "Corporate Hierarchies and the Size of Nations: Theory and Evidence," Discussion Papers in Economics 1346, University of Munich, Department of Economics.
  3. Robert Feenstra, 2003. "Integration Of Trade And Disintegration Of Production In The Global Economy," Working Papers 986, University of California, Davis, Department of Economics.
  4. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
  5. Bartel, Ann P. & Lach, Saul & Sicherman, Nachum, 2009. "Outsourcing and Technological Change," IZA Discussion Papers 4678, Institute for the Study of Labor (IZA).
  6. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-28, June.
  7. Griffith, Rachel, 1999. "Using the ARD Establishment Level Data to Look at Foreign Ownership and Productivity in the United Kingdom," Economic Journal, Royal Economic Society, vol. 109(456), pages F416-42, June.
  8. Pol Antras & Elhanan Helpman, 2004. "Global Sourcing," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 552-580, June.
  9. Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2003. "The case of the missing productivity growth: or, does information technology explain why productivity accelerated in the United States but not the United Kingdom?," Working Paper Series WP-03-08, Federal Reserve Bank of Chicago.
  10. George P. Baker & Thomas N. Hubbard, 2002. "Make Versus Buy in Trucking: Asset Ownership, Job Design and Information," NBER Working Papers 8727, National Bureau of Economic Research, Inc.
  11. Sawyer, Malcolm (ed.), 2004. "The UK Economy," OUP Catalogue, Oxford University Press, edition 16, number 9780199266517.
  12. repec:hrv:faseco:4784029 is not listed on IDEAS
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