Services Outsourcing and Innovation: An Empirical Investigation
affiliation not provided to SSRN
Nottingham University Business School (NUBS) - Industrial Economics Division
Economic Inquiry, Vol. 49, No. 2, pp. 321-333, 2011
We provide a comprehensive empirical analysis of the links between international services outsourcing, domestic outsourcing, profits, and innovation using plant-level data. We find a positive effect of international outsourcing of services on innovative activity at the plant level. Such a positive effect can also be observed for domestic outsourcing, but the magnitude is smaller. We also find that international services outsourcing has a positive effect on profitability, as predicted by theory, whereas this is not true for domestic sourcing. The results are robust to various specifications and an instrumental variables analysis.
Number of Pages in PDF File: 13
JEL Classification: F19, O31Accepted Paper Series
Date posted: March 21, 2011
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