Outsourcing, Foreign Ownership and Productivity: Evidence from UK Establishment Level Data
GEP Working Paper No. 2002/16
27 Pages Posted: 11 Sep 2003
Date Written: September 2002
Abstract
This paper presents an empirical analysis of "outsourcing" using establishment level data for UK manufacturing industries. We analyse an establishment's decision to outsource and the subsequent effects of outsourcing on the establishment's productivity. We compare outsourcing in domestic with foreign-owned establishments. Our empirical results suggest that high wages are positively related to outsourcing, suggesting that the cost saving motive is important. We also find that foreign-owned firms have higher levels of outsourcing than domestic establishments. In the productivity analysis we find that an establishment's outsourcing intensity is positively related to its labour productivity and total factor productivity growth and that this effect is more pronounced for foreign establishments.
Keywords: outsourcing, foreign direct investment, productivity
JEL Classification: F23, L23
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Nature and Growth of Vertical Specialization in World Trade
By David L. Hummels, Jun Ishii, ...
-
Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras
-
Integration vs. Outsourcing in Industry Equilibrium
By Gene M. Grossman and Elhanan Helpman
-
Firms, Contracts, and Trade Structure
By Pol Antras
-
The Evolving External Orientation of Manufacturing: A Profile of Four Countries
-
The Evolving External Orientation of Manufacturing Industries: Evidence from Four Countries
-
Can Vertical Specialization Explain the Growth of World Trade?
By Kei-mu Yi