Why do some firms contract out production?
The present paper examines which factors determine outsourcing decision using firm-level panel data for Spanish manufacturing industries. Outsourcing is measured as the manufacture of custom-made finished products or parts and components which have been contracted out to third parties. Moreover, we distinguish whether the main contractor provides the materials to the external supplier or not. Following the theoretical framework of Grossman and Helpman (2002), we take into account the persistence of outsourcing decision as well as other firm, industry and market characteristics that influence the likelihood of contracting out. Using a dynamic panel data probit model, our results show that previous subcontracting decision, wages, market changes, R&D activities, product and process innovation, product differentiation, industry-size and exporter status affect positively the current subcontracting decision.
Authors: | Triguero, Angela ; Mora, Carmen Díaz |
---|---|
Institutions: | FEDEA |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Estrategias de fragmentación de la producción: Una realidad en la industria española?
Mora, Carmen Díaz,
-
DETERMINANTS OF OUTSOURCING PRODUCTION: A Dynamic Panel Data Approach for Manufacturing Industries
Mora, Carmen Díaz,
-
El offshoring en la industria española: una revisión de la evidencia empírica
Juste, Rosario Gandoy, (2007)
- More ...