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

Author

Listed:
  • John T. Addison

    (Department of Economics, University of South Carolina, GEMF/University of Coimbra, and IZA Bonn)

  • Lutz Bellmann

    (Institut für Arbeitsmarkt- und Berufsforschung der Bundesagentur für Arbeit, Nürnberg)

  • André Pahnke

    (Institut für Arbeitsmarkt- und Berufsforschung der Bundesagentur für Arbeit, Nürnberg)

  • Paulino Teixeira

    (GEMF and Faculty of Economics of the University of Coimbra)

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.

Suggested Citation

  • John T. Addison & Lutz Bellmann & André Pahnke & Paulino Teixeira, 2008. "A Note on the Determinants and Consequences of Outsourcing Using German Data," GEMF Working Papers 2008-04, GEMF, Faculty of Economics, University of Coimbra.
    • Handle: RePEc:gmf:wpaper:2008-04
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    References listed on IDEAS

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    1. Holger Görg & Aoife Hanley & Eric Strobl, 2008. "Productivity effects of international outsourcing: evidence from plant‐level data," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(2), pages 670-688, May.
    2. Robert C. Feenstra & Gordon H. Hanson, 1999. "The Impact of Outsourcing and High-Technology Capital on Wages: Estimates For the United States, 1979–1990," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 907-940.
    3. Holger Görg & Aoife Hanley, 2004. "Does Outsourcing Increase Profitability?," The Economic and Social Review, Economic and Social Studies, vol. 35(3), pages 267-288.
    4. Gorg, Holger & Hanley, Aoife, 2005. "Labour demand effects of international outsourcing: Evidence from plant-level data," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 365-376.
    5. Wei, Shang-Jin & Amiti, Mary, 2004. "Fear of Outsourcing: Is It Justified?," CEPR Discussion Papers 4719, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Alessandro Bramucci & Antonello Zanfei, 2015. "The governance of offshoring and its effects at home. The role of codetermination in the international organization of German firms," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(2), pages 217-244, June.
    2. Joachim Wagner, 2011. "Offshoring and firm performance: self-selection, effects on performance, or both?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(2), pages 217-247, June.
    3. Tobias Brändle, 2015. "Is offshoring linked to offshoring potential? Evidence from German linked employer–employee data," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(4), pages 735-766, November.
    4. Jens Mohrenweiser & Paul Marginson & Uschi Backes-Gellner, 2012. "What triggers the establishment of a works council?," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 33(2), pages 295-316, May.

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    More about this item

    Keywords

    outsourcing; organizational change; employment change; plant closings; value added;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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