DP6361 Productivity Effects of International Outsourcing: Evidence from Plant Level Data

Author(s): Holger Görg, Aoife Hanley, Eric Strobl
Publication Date: June 2007
Keyword(s): exporting, International outsourcing, multinational enterprises, productivity
JEL(s): F14, F23, L23
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=6361

We investigate the impact of international outsourcing on productivity using plant level data for Irish manufacturing. Specifically, we distinguish the effect of outsourcing of materials from services inputs. Moreover, we examine whether the impact on productivity is different for plants being more embedded in international markets through exporting or being part of a multinational. Our results show robust evidence for positive effects from outsourcing of services inputs for exporters, either domestic- or foreign-owned. By contrast, we find no statistically significant evidence of an impact of international outsourcing of services on productivity for firms not operating on the export market.