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

Author

Listed:
  • Laura Abramovsky

    (Institute for Fiscal Studies and Institute for Fiscal Studies)

  • Rachel Griffith

    (Institute for Fiscal Studies and IFS and 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.

Suggested Citation

  • Laura Abramovsky & Rachel Griffith, 2005. "Outsourcing and offshoring of business services: how important is ICT?," IFS Working Papers W05/22, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:05/22
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Outsourcing; offshoring; ICT; business services;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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