Outsourcing Foreign Services and the Internet: Evidence from Firm Level Data
Authors
Holger Görg
Institut für Weltwirtschaft, Kiel, Germany
Christian Albrechts University, Kiel, Germany
Aoife Hanley
Institut für Weltwirtschaft, Kiel, Germany
Christian Albrechts University, Kiel, Germany
Ingrid Ott
Institut für Weltwirtschaft, Kiel, Germany
Karlsruhe Institute of Technology (KIT), Germany
Keywords:
outsourcing, internet, Ireland
Abstract
We analyse the link between internet use and foreign sourcing of services and materials inputs. In our empirical analysis using firm level data for Ireland we find, among firms that a priori all purchase inputs abroad, that those who commenced outsourcing from suppliers over the internet (“Adopters”) experience significantly higher growth rates of services offshoring. This result shows in a variety of econometric methods (OLS, Propensity Scoring (Kernel, Nearest Neighbour and Caliper Matching)). Adopting the internet for outsourcing induced an increase in the share of foreign services by 3.2-4.0 per cent.
