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Trends in Inter-Firm Transactions Across Industries in the U.S

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  • Hammerling, Jessie HF

Abstract

This paper explores trends in inter-firm transactions (IFT) in the U.S. in relation to the varied approaches that researchers have used to study domestic outsourcing. I develop a typology of IFT that references distinct definitions of outsourcing, and I generate a new methodology for measuring domestic IFT using the Bureau of Economic Analysis National Input-Output Accounts data. I analyze IFT trends for individual industries and for three groups: all goods and services, all services, and only services that could feasibly be produced in-house by the purchaser. Trends in IFT vary considerably across industries, but IFT for services and for feasibly in-house services have increased in recent decades, both as a portion of total economic output and as a portion of services output. This study offers the first comprehensive assessment of changes in domestic IFT in the U.S., and establishes a conceptual and empirical foundation for further research on domestic outsourcing.

Suggested Citation

  • Hammerling, Jessie HF, 2022. "Trends in Inter-Firm Transactions Across Industries in the U.S," Institute for Research on Labor and Employment, Working Paper Series qt9dr868wx, Institute of Industrial Relations, UC Berkeley.
    • Handle: RePEc:cdl:indrel:qt9dr868wx
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    References listed on IDEAS

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    1. Matthew Dey & Susan N. Houseman & Anne Polivka, 2010. "What Do We Know about Contracting Out in the United States? Evidence from Household and Establishment Surveys," Book chapters authored by Upjohn Institute researchers, in: Katharine G. Abraham & James R. Spletzer & Michael J. Harper (ed.),Labor in the New Economy, pages 267-304, W.E. Upjohn Institute for Employment Research.
    2. Karen J. Horowitz & Mark A. Planting, 2006. "Concepts and Methods of the U.S. Input-Output Accounts," BEA Papers 0066, Bureau of Economic Analysis.
    3. Dube, Arindrajit & Kaplan, Ethan, 2008. "Does Outsourcing Reduce Wages in the Low Wage Service Occupations? Evidence from Janitors and Guards," Institute for Research on Labor and Employment, Working Paper Series qt6s89498v, Institute of Industrial Relations, UC Berkeley.
    4. Arindrajit Dube & Ethan Kaplan, 2010. "Does Outsourcing Reduce Wages in the Low-Wage Service Occupations? Evidence from Janitors and Guards," ILR Review, Cornell University, ILR School, vol. 63(2), pages 287-306, January.
    5. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 394-424, July.
    6. Lewis M. Segal & Daniel G. Sullivan, 1997. "The Growth of Temporary Services Work," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 117-136, Spring.
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    Keywords

    Social and Behavioral Sciences; firms and organizations; methods;
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