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The causal effect of institutional quality on outsourcing

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  • H.J. Roelfsema
  • Zhang Yi

Abstract

This paper empirically investigates the relationship between institutional quality and outsourcing to developing economies. In contrast to cross-sectional studies on institutions, this paper uses panel data for 76 countries over 25 years (1980-2004). Employing panel data helps to show the causal relationship by controlling for the fixed effects and dynamic factors. Using within and IV estimations, we find that there is a positive effect of institutional quality on outsourcing in the lower-middle income countries. The quality of institutions is not an important determinant of outsourcing to either low or high income countries.

Suggested Citation

  • H.J. Roelfsema & Zhang Yi, 2009. "The causal effect of institutional quality on outsourcing," Working Papers 09-03, Utrecht School of Economics.
    • Handle: RePEc:use:tkiwps:0903
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    Cited by:

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    2. Ronald B. Davies & Rodolphe Desbordes, 2018. "Export Processing Zones and the Composition of Greenfield FDI," Working Papers 201807, School of Economics, University College Dublin.
    3. Sławomir Pastuszka, 2013. "Zagraniczne inwestycje bezpośrednie w regionie świętokrzyskim w latach 2005-2011," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 10, pages 93-115.
    4. Tingvall, Patrik, 2011. "Dynamic Effects of Corruption on Offshoring," Ratio Working Papers 182, The Ratio Institute.
    5. Xiangjun Ma, 2017. "Do taxes influence the organizational boundaries of international firms? An incomplete-contracting model with empirical evidence," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 26(7), pages 801-828, October.

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    Keywords

    Institutional quality; Outsourcing; Developing countries;
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