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

Listed author(s):
  • 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)

Registered author(s):

    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.

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    File URL: http://www.esr.ie/article/download/398/114/398-1061-1-PB.pdf
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    Article provided by Economic and Social Studies in its journal Economic and Social Review.

    Volume (Year): 46 (2015)
    Issue (Month): 3 ()
    Pages: 367-387

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    Handle: RePEc:eso:journl:v:46:y:2015:i:3:p:367-387
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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, 04.
    2. Gene M. Grossman & Elhanan Helpman, 2005. "Outsourcing in a Global Economy," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 135-159.
    3. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 605-654.
    4. 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.
    5. Holger Görg & Aoife Hanley, 2004. "Does Outsourcing Increase Profitability?," The Economic and Social Review, Economic and Social Studies, vol. 35(3), pages 267-288.
    6. 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.
    7. Mary Amiti & Shang-Jin Wei, 2009. "Service Offshoring and Productivity: Evidence from the US," The World Economy, Wiley Blackwell, vol. 32(2), pages 203-220, February.
    8. Laura Abramovsky & Rachel Griffith, 2006. "Outsourcing and Offshoring of Business Services: How Important is ICT?," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 594-601, 04-05.
    9. Mari Sako, 2006. "Outsourcing and Offshoring: Implications for Productivity of Business Services," Oxford Review of Economic Policy, Oxford University Press, vol. 22(4), pages 499-512, Winter.
    10. Fergal McCann, 2011. "The heterogeneous effect of international outsourcing on firm productivity," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(1), pages 85-108, April.
    11. Alla Lileeva & Johannes Van Biesebroeck, 2013. "Outsourcing When Investments Are Specific And Interrelated," Journal of the European Economic Association, European Economic Association, vol. 11(4), pages 871-896, 08.
    12. Laura Abramovsky & Rachel Griffith, 2009. "ICT, corporate restructuring and productivity," IFS Working Papers W09/10, Institute for Fiscal Studies.
    13. Sébastien Miroudot & Rainer Lanz & Alexandros Ragoussis, 2009. "Trade in Intermediate Goods and Services," OECD Trade Policy Papers 93, OECD Publishing.
    14. Ann P. Bartel & Saul Lach & Nachum Sicherman, 2014. "Technological Change and the Make-or-Buy Decision," Journal of Law, Economics and Organization, Oxford University Press, vol. 30(1), pages 165-192.
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