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Outsourcing, productivity, and input composition at the plant level

Catherine Morrison Paul and Mahmut Yasar

Canadian Journal of Economics, 2009, vol. 42, issue 2, 422-439

Abstract: We evaluate the productivity and input composition effects of outsourcing (or subcontracting) for Turkish textile and apparel manufacturing plants. We analyze differences in performance indicators for plants that subcontract inputs or outputs, and find that plants that outsource internationally perform better than those that outsource domestically. We evaluate labour productivity gaps and find that more productive plants both initiate outsourcing and subsequently increase their productivity. We then estimate a flexible production function, controlling for simultaneity and selection bias, and find that higher productivity from input subcontracting involves greater skilled labour intensity but the reverse is true for output subcontracting.

JEL-codes: D24 F14 L60 (search for similar items in EconPapers)
Date: 2009
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