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

  • Laura Abramovsky

    ()

    (Institute for Fiscal Studies and Institute for Fiscal Studies)

  • Rachel Griffith

    ()

    (Institute for Fiscal Studies and IFS and Manchester)

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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File URL: http://www.ifs.org.uk/wps/wp0522.pdf
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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: 14 Oct 2005
Date of revision:
Handle: RePEc:ifs:ifsewp:05/22
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  1. Antràs, Pol & Helpman, Elhanan, 2004. "Global Sourcing," CEPR Discussion Papers 4170, C.E.P.R. Discussion Papers.
  2. 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.
  3. Marin, Dalia & Verdier, Thierry, 2008. "Corporate Hierarchies and the Size of Nations: Theory and Evidence," CEPR Discussion Papers 6734, C.E.P.R. Discussion Papers.
  4. Sawyer, Malcolm (ed.), 2004. "The UK Economy," OUP Catalogue, Oxford University Press, edition 16, number 9780199266517, December.
  5. Marin, Dalia & Verdier, Thierry, 2002. "Globalization and the 'New Enterprise'," Discussion Papers in Economics 11, University of Munich, Department of Economics.
  6. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
  7. 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.
  8. repec:hrv:faseco:4784029 is not listed on IDEAS
  9. Bartel, Ann P. & Lach, Saul & Sicherman, Nachum, 2009. "Outsourcing and Technological Change," IZA Discussion Papers 4678, Institute for the Study of Labor (IZA).
  10. 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.
  11. 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.
  12. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817, December.
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