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IT outsourcing and employment growth at the firm level

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  • Ohnemus, Jörg

Abstract

Outsourcing is widely associated with accompanied job losses in the outsourcing firm, at least in the short run. However, the medium and long run effects of outsourcing on employment growth might still be positive. This paper particularly focuses on IT outsourcing and its medium-term effects on employment growth. Therefore, a three year time period from 2003 to 2006 is analysed using German firm-level data and instrumental variable estimation. I find evidence that IT outsourcing has a positive effect on firms' employment growth rate. However, dividing the sample into manufacturing and service firms, a medium-term positive growth effect of IT outsourcing can only be observed for firms operating in the service sector.

Suggested Citation

  • Ohnemus, Jörg, 2010. "IT outsourcing and employment growth at the firm level," ZEW Discussion Papers 10-108, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:10108
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    References listed on IDEAS

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    1. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 255-284, April.
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    1. Irene Bertschek & Daniel Erdsiek & Manuel Trenz, 2017. "IT Outsourcing—A Source of Innovation? Microeconometric Evidence for Germany," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(7), pages 941-954, October.
    2. Muneeb Ahmad & Kashif Raza & Rana Naeem Shahid, 2012. "Causes of Increasing Demand of Employees Outsourcing and Its Impact on Pakistan Business," International Journal of Learning and Development, Macrothink Institute, vol. 2(3), pages 294-312, June.

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    More about this item

    Keywords

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    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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