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Outsourcing Foreign Services and the Internet: Evidence from Firm Level Data

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Listed:
  • Holger Görg

    (Institut für Weltwirtschaft, Kiel, Germany; Christian Albrechts University, Kiel, Germany)

  • Aoife Hanley

    (Institut für Weltwirtschaft, Kiel, Germany; Christian Albrechts University, Kiel, Germany)

  • Ingrid Ott

    (Institut für Weltwirtschaft, Kiel, Germany; Karlsruhe Institute of Technology, Germany)

Abstract

We analyse the link between internet use and foreign sourcing of services and materials inputs. In our empirical analysis using firm level data for Ireland we find, among firms that a priori all purchase inputs abroad, that those who commenced outsourcing from suppliers over the internet (“Adopters”) experience significantly higher growth rates of services offshoring. This result shows in a variety of econometric methods (OLS, Propensity Scoring (Kernel, Nearest Neighbour and Caliper Matching)). Adopting the internet for outsourcing induced an increase in the share of foreign services by 3.2-4.0 per cent.

Suggested Citation

  • Holger Görg & Aoife Hanley & Ingrid Ott, 2015. "Outsourcing Foreign Services and the Internet: Evidence from Firm Level Data," The Economic and Social Review, Economic and Social Studies, vol. 46(3), pages 367-387.
  • Handle: RePEc:eso:journl:v:46:y:2015:i:3:p:367-387
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    References listed on IDEAS

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    1. Holger Görg & Aoife Hanley, 2011. "Services Outsourcing And Innovation: An Empirical Investigation," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 321-333, April.
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    3. Holger Görg & Aoife Hanley & Eric Strobl, 2008. "Productivity effects of international outsourcing: evidence from plant-level data," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 670-688, May.
    4. Holger Görg & Aoife Hanley, 2004. "Does Outsourcing Increase Profitability?," The Economic and Social Review, Economic and Social Studies, vol. 35(3), pages 267-288.
    5. Alexander Hijzen & Tomohiko Inui & Yasuyuki Todo, 2010. "Does Offshoring Pay? Firm-Level Evidence From Japan," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 880-895, October.
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    11. Laura Abramovsky & Rachel Griffith, 2009. "ICT, corporate restructuring and productivity," IFS Working Papers W09/10, Institute for Fiscal Studies.
    12. Sébastien Miroudot & Rainer Lanz & Alexandros Ragoussis, 2009. "Trade in Intermediate Goods and Services," OECD Trade Policy Papers 93, OECD Publishing.
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    Keywords

    outsourcing; internet; Ireland;

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