Increasingly, the existence of firm-level wage differences is explained by the rent-sharing hypothesis. A necessary condition for rent-sharing is the assumption that firms are acting on imperfect product markets such that they can achieve quasi-monopolistic rents. In particular, IO literature is...

Based on data from the German Cost Structure Census from approximately 39,000 companies between the years of 1992 to 2003, we investigate how outsourcing activities affected the return on sales of companies. We find that outsourcing activities, particularly by large companies, significantly...