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Productivity Growth, Efficiency and Outsourcing in Manufacturing and Service Industries

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  • Almas Heshmati

Abstract

This paper is a survey of recent contributions to, and developments of, the relationship between outsourcing, efficiency and productivity growth in manufacturing and services. The objective is to provide a thorough and up–to–date survey that provides a significant discussion on data, as well as on the core methods of measuring efficiency and productivity. First, the readers are introduced to the measurement of partial and total factor productivity growth. Different parametric and non–parametric approaches to the productivity measurement in the context of static, dynamic and firm–specific modelling are discussed. Second, we survey the econometric approach to efficiency analysis. The issues of modelling, distributional assumptions and estimation methods are discussed assuming that cross–sectional or panel data are available. Third, the relationship between outsourcing and productivity growth in manufacturing and services is discussed. The correspondence between a number of hypotheses and empirical findings are examined. Examples of varieties of relevant empirical applications, their findings and implications are presented. Fourth, measurement of inputs and outputs in manufacturing and services are discussed. Finally, to promote useful research, a number of factors important to the analysis of outsourcing, efficiency and productivity growth in the service sector are summarised.

Suggested Citation

  • Almas Heshmati, 2003. "Productivity Growth, Efficiency and Outsourcing in Manufacturing and Service Industries," Journal of Economic Surveys, Wiley Blackwell, vol. 17(1), pages 79-112, February.
  • Handle: RePEc:bla:jecsur:v:17:y:2003:i:1:p:79-112
    DOI: 10.1111/1467-6419.00189
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    More about this item

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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