Assessing the impact of domestic outsourcing and offshoring on productivity at the firm level
Abstract:The purpose of this article is to investigate the effects of domestic and foreign sourcing on firm-level productivity. We develop a simple framework that permits the introduction of both domestic outsourcing and offshoring in a conventional production function. We find that the decision to outsource has a positive impact on the level of productivity as it permits the relocation of parts of the production process to external suppliers. Furthermore, there is a positive impact on output resulting from domestic outsourcing and offshoring like any other input.
Document Type: Research Article
Affiliations: 1: Departamento de Economía Aplicada II, Universidad Complutense de Madrid, Madrid, Spain 2: Departamento de Fundamentos del Análisis Económico I, Universidad Complutense de Madrid, Madrid, Spain 3: Departamento de Análisis Económico II, UNED, Madrid, Spain
Publication date: May 24, 2014