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What factors determine the outsourcing intensity? A dynamic panel data approach for manufacturing industries

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  • Carmen Diaz-Mora

Abstract

The present article investigates the determinants of outsourcing production using a panel of 93 Spanish manufacturing industries for the period 1993 to 2002. Outsourcing is measured as production tasks which are contracting out to external suppliers, a more direct and suitable indicator. After controlling for unobserved heterogeneity and simultaneity, our results show a high persistence of the outsourcing intensity. Moreover, outsourcing of production is positively related to unit labour costs, skills requirements, national ownership and orientation to international markets. We also find evidence for a negative link between the outsourcing intensity and the share of small firms.

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  • Carmen Diaz-Mora, 2008. "What factors determine the outsourcing intensity? A dynamic panel data approach for manufacturing industries," Applied Economics, Taylor & Francis Journals, vol. 40(19), pages 2509-2521.
    • Handle: RePEc:taf:applec:v:40:y:2008:i:19:p:2509-2521
    DOI: 10.1080/00036840600970179
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    Cited by:

    1. Siwook Lee, 2023. "What Determines In-house Service Activities within Manufacturing Firms: Firm-level Evidence from Korea," Korean Economic Review, Korean Economic Association, vol. 39, pages 445-468.
    2. Roger Strange, 2011. "The outsourcing of primary activities: theoretical analysis and propositions," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 15(2), pages 249-269, May.
    3. Keuschnigg, Christian & Ribi, Evelyn, 2009. "Outsourcing, unemployment and welfare policy," Journal of International Economics, Elsevier, vol. 78(1), pages 168-176, June.
    4. Mery Patricia Tamayo & Elena Huergo, 2014. "Determinants of internal versus external R&D offshoring: Evidence from Spanish firms," Documentos de Trabajo de Valor Público 12452, Universidad EAFIT.
    5. Àngels Pelegrín Solé & Catalina Bolance Losilla, 2010. "International industry migration and firm characteristics: some evidence from the analysis of firm data," Working Papers 2010/20, Institut d'Economia de Barcelona (IEB).
    6. Auer, Raphael A. & Degen, Kathrin & Fischer, Andreas M., 2013. "Low-wage import competition, inflationary pressure, and industry dynamics in Europe," European Economic Review, Elsevier, vol. 59(C), pages 141-166.
    7. Àngels Pelegrín Solé & Catalina Bolance Losilla, 2010. "International industry migration and firm characteristics: some evidence from the analysis of firm data," Working Papers 2010/20, Institut d'Economia de Barcelona (IEB).

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