Productivity effects of international outsourcing: evidence from plant‐level data

Abstract

We investigate the impact of international outsourcing on productivity using plant level data for Irish manufacturing. Specifically, we distinguish the effect of outsourcing of materials from services inputs. Moreover, we examine whether the impact on productivity is different for plants being more embedded in international markets through exporting or being part of a multinational. Our results show that productivity benefits only accrue to affiliates of foreignowned multinationals and exporters. In particular, for foreign-owned exporting plants increased international outsourcing of both services and materials is associated with higher productivity, whereas this link only exists for domestic exporters' outsourcing of materials.

Is labor flexibility a substitute to offshoring? Evidence from Italian manufacturing

“…Thanks to the productivity-enhancing effect of offshoring, even factors of production whose tasks are offshored can benefit from the international delocalization of production (Grossman and Rossi-Hansberg, 2008). The empirical evidence broadly supports this view (Görg et al, 2008;Daveri and Jona-Lasinio, 2008;Hijzen et al, 2010;Jabbour, 2010). However, higher productivity comes at the cost of higher demand elasticities for production workers (Sensen, 2010), increasing job instability (Geishecker, 2008;Lo Turco et al, 2013), broadening wage inequality due to the increase in the relative demand for skilled workers (Feenstra andHanson, 1996,1999;Broccolini et al, 2011), and higher unemployment in presence of imperfect intersectoral labor mobility (Mitra and Ranjan, 2010).…”

How does investing in cheap labour countries affect performance at home? Firm-level evidence from France and Italy

“…However, this contribution represents only one-fifth of the deindustrialisation process over the period analysed. Görg et al (2008) analyse the impact of outsourcing on productivity at the firm level for a sample of Irish firms. They find that the outsourcing of material inputs has a positive effect on the productivity of those firms which are also exporting.…”

Do labour market institutions matter? Micro-level wage effects of international outsourcing in three European countries

“…As a result, trade with low-wage countries can dramatically lower aggregate domestic production and employment. 2 See, e.g., Amiti and Wei (2009) and Görg et al (2008). losses from international outsourcing. In the public but also academic debate one often refers to the European Social Model or the European Welfare System partly to contrast the American Social Model.…”