Does Outsourcing Increase Profitability?

By Holger Görg, Aoife Hanley. Social Science Research Network, 2004

149 citations recorded by the source corpus.

We investigate the relationship between outsourcing and profitability paying particular attention to the endogeneity of outsourcing. The empirical analysis uses unique plant level data for the electronics sector in Ireland. A particular feature of the data is that it records detailed information for 12 electronics sub-sectors covering both manufacturing and services activities. We distinguish outsourcing of materials from outsourcing of services inputs. We find that plants that are substantially larger than the mean employment size benefit from outsourcing materials and services inputs, while this does not appear to be the case for small plants. Results for outsourcing of services are not as clear-cut, however.

Subfields: Economics and Econometrics, Management Information Systems

View Paper: https://www.semanticscholar.org/paper/2ded5a694e3be971ca85b2f71976709ece8edc0c

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Citations in the corpus

Outsourcing decision, product innovation and the spatial dimension: evidence from the Spanish footwear industry (2009, background): “Paying special attention to internationalization and foreign trade, Kimura (2001) and Görg and Hanley (2004) introduced in their models the export intensity obtaining a significant and positive relationship with the development of outsourcing strategies.”
Shifting sources and uses of profits: sustaining US financialization with global value chains (2008, background): “Gorg and Hanley (2004) , using a sample of 12 Irish electronics”
Productivity Impacts of Offshoring and Outsourcing: A Review (2006, background): “These results could support the positive productivity effects in skill intensive industries due to increased specialisation and a focus on core competences, and are thus comparable, in essence, with some of the results derived from Görg and Hanley (2003b) and, to some extent, Girma and Görg (2004).”
Offshore outsourcing as a source of international competitiveness for SMEs (2009, background): “By integrating the extant literature on offshoring (Görg & Aoife, 2003; Görg, Aoife, & Strobl, 2004) with the literature on the role of networks and learning in the internationalization process (Chetty & Agndal, 2007; Coviello & Munro, 1997; Johanson & Vahlne, 2003, 2006), we conceptualize the…”
Offshoring and firm performance: self-selection, effects on performance, or both? (2009, background): “Studies with German firm level data include Görzig, Kaminiarz and Stephan (2005) and Addison et al. (2008), for the UK see Girma and Görg (2004), for Ireland Görg and Hanley (2004).”