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IT outsourcing - A source of innovation? Microeconometric evidence for Germany

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  • Bertschek. Irene
  • Erdsiek, Daniel

Abstract

Do firms sourcing out IT services redirect their resources to innovation activity? We attempt to answer this question by analysing a firm-level data set comprising 1453 firms from the German manufacturing and services sectors. Using different measures of IT outsourcing (ITO), the econometric estimations reveal a significant and U-shaped relationship between ITO and product innovation activity of manufacturing firms, and a significant and hump-shaped relationship between ITO and process innovation activity of services firms. A propensity score matching analysis takes account of reverse causality; the results underpin the relevance of ITO for services firms' realisation of process innovation.

Suggested Citation

  • Bertschek. Irene & Erdsiek, Daniel, 2012. "IT outsourcing - A source of innovation? Microeconometric evidence for Germany," ZEW Discussion Papers 12-088, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:12088
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    Cited by:

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    More about this item

    Keywords

    IT outsourcing; product innovation; process innovation; firm-level data;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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