Knowledge Transfer Under Subcontracting: Evidence from Czech Firms

Posted: 17 Jan 2001

See all articles by Alan V. Deardorff

Alan V. Deardorff

University of Michigan at Ann Arbor - Department of Economics; University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy

Simeon Djankov

London School of Economics & Political Science (LSE); Peterson Institute for International Economics

Abstract

We investigate the significance of subcontracting arrangements as a source of knowledge transfer and increased efficiency for Czech firms during 1993-96. We draw on detailed enterprise surveys and interviews with the managers of 373 manufacturing firms in the Prague region. The results suggest a positive correlation between employee training and subcontracting. Subcontracting is also associated with a reduction in variable costs and a price premium on the stock market. The effect of subcontracting on other firms in the same industry is weak. A high share of subcontracting activity in a particular industry is associated with increased valuation of firms without foreign partners as investors anticipate more subcontracting arrangements.

Keywords: Czech Republic; subcontracting; knowledge transfer

Suggested Citation

Deardorff, Alan V. and Deardorff, Alan V. and Djankov, Simeon, Knowledge Transfer Under Subcontracting: Evidence from Czech Firms. Available at SSRN: https://ssrn.com/abstract=252890

Alan V. Deardorff (Contact Author)

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
458 Lorch Hall
Ann Arbor, MI 48109-1220
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313-764-6817 (Phone)
313-764-2769 (Fax)

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

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Ann Arbor, MI 48109
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Simeon Djankov

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

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