TY  - RPRT
        AU  - Görg, Holger
AU  - Hanley, Aoife
        TI  - Services Outsourcing and Innovation: An Empirical Investigation
        PY  - 2009/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 4404
        UR  - https://www.iza.org/publications/dp4404
        AB  - We provide a comprehensive empirical analysis of the links between international services outsourcing, domestic outsourcing, profits and innovation using plant level data. We find a positive effect of international outsourcing of services on innovative activity at the plant level. Such a positive effect can also be observed for domestic outsourcing of services, but the magnitude is smaller. This makes intuitive sense, as international outsourcing allows more scope for exploiting international factor price differentials, therefore giving the establishment higher profits and more scope to restructure production activities towards innovation. We also find that international services outsourcing has a positive effect on profitability, as predicted by theory, while this is not true for domestic sourcing. The results are robust to various specifications and an instrumental variables analysis.
        KW  - offshoring
KW  - services outsourcing
KW  - innovation
KW  - R&D
        ER  -