A Note on the Determinants and Consequences of Outsourcing Using German Data

22 Pages Posted: 11 Aug 2008

See all articles by John T. Addison

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics; IZA Institute of Labor Economics

Lutz Bellmann

Institute for Employment Research (IAB); Institute for the Study of Labor (IZA)

Andre Pahnke

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Paulino Teixeira

Universidade de Coimbra - Faculdade de Economia; Center for European Economic Research (ZEW)

Abstract

Using German data from the Institute for Employment Research Establishment Panel, this paper constructs two main measures of outsourcing and examines their determinants and consequences for employment. There are some commonalities in the correlates of the two measures of outsourcing, as well as agreement on the absence of adverse employment effects across all industries. For one specification, however, some negative effects are reported for manufacturing industry, balanced by positive effects for the services sector for another. But there are no indications of survival bias. This is because the association between outsourcing and plant closings is predominantly negative, albeit poorly determined.

Keywords: outsourcing, organizational change, employment change, plant closings, value added

JEL Classification: F16, J23

Suggested Citation

Addison, John T. and Bellmann, Lutz and Pahnke, Andre and Teixeira, Paulino, A Note on the Determinants and Consequences of Outsourcing Using German Data. IZA Discussion Paper No. 3608. Available at SSRN: https://ssrn.com/abstract=1214911 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

John T. Addison (Contact Author)

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
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Columbia, SC 29208
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803-777-7400 (Phone)
803-777-6876 (Fax)

HOME PAGE: http://mooreschool.sc.edu/moore/economics/profiles/addison.htm

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Lutz Bellmann

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany
+49 911 179 3046 (Phone)
+49 911 179 3297 (Fax)

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Andre Pahnke

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Paulino Teixeira

Universidade de Coimbra - Faculdade de Economia ( email )

Av. Dias da Silva, 165
Coimbra, 3004-512
Portugal

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

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