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The causal effect of institutional quality on outsourcing

Listed author(s):
  • H.J. Roelfsema
  • Zhang Yi

This paper empirically investigates the relationship between institutional quality and outsourcing to developing economies. In contrast to cross-sectional studies on institutions, this paper uses panel data for 76 countries over 25 years (1980-2004). Employing panel data helps to show the causal relationship by controlling for the fixed effects and dynamic factors. Using within and IV estimations, we find that there is a positive effect of institutional quality on outsourcing in the lower-middle income countries. The quality of institutions is not an important determinant of outsourcing to either low or high income countries.

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File URL: http://dspace.library.uu.nl/bitstream/handle/1874/309432/09_03.pdf
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Paper provided by Utrecht School of Economics in its series Working Papers with number 09-03.

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Date of creation: Feb 2009
Handle: RePEc:use:tkiwps:0903
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  1. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
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  18. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
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