Outsourcing, Productivity, and Input Composition at the Plant Level

18 Pages Posted: 27 Apr 2009

See all articles by Catherine J. Morrison Paul

Catherine J. Morrison Paul

University of California, Davis - Department of Agricultural and Resource Economics; National Bureau of Economic Research (NBER); University of Hartford - Barney School of Business

Mahmut Yasar

University of Texas at Arlington - Department of Economics; Emory University - Department of Economics

Abstract

We evaluate the productivity and input composition effects of outsourcing (or subcontracting) for Turkish textile and apparel manufacturing plants. We analyze differences in performance indicators for plants that subcontract inputs or outputs, and find that plants that outsource internationally perform better than those that outsource domestically. We evaluate labour productivity gaps and find that more productive plants both initiate outsourcing and subsequently increase their productivity. We then estimate a flexible production function, controlling for simultaneity and selection bias, and find that higher productivity from input subcontracting involves greater skilled labour intensity but the reverse is true for output subcontracting.

Suggested Citation

Morrison Paul, Catherine J. and Yasar, Mahmut, Outsourcing, Productivity, and Input Composition at the Plant Level. Canadian Journal of Economics, Vol. 42, Issue 2, pp. 422-439, May 2009, Available at SSRN: https://ssrn.com/abstract=1375899 or http://dx.doi.org/10.1111/j.1540-5982.2009.01514.x

Catherine J. Morrison Paul (Contact Author)

University of California, Davis - Department of Agricultural and Resource Economics ( email )

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National Bureau of Economic Research (NBER)

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University of Hartford - Barney School of Business

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Mahmut Yasar

University of Texas at Arlington - Department of Economics ( email )

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Arlington, TX 76019
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Emory University - Department of Economics ( email )

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