Make or Buy: Offshoring of Services Functions in Manufacturing

Hildegunn Nordås

Review of Industrial Organization, 2020, vol. 57, issue 2, No 9, 378 pages

Abstract: Abstract About 40% of employment in manufacturing is in services functions. This paper develops a measure of narrow outsourcing: the matching of services functions that are performed by workers who are inside manufacturing firms to the same services functions that are provided by outside suppliers. Narrow outsourcing is entered into labour demand functions where labour is classified by business functions. The impact of narrow offshoring on manufacturing labour demand is small on average but depends strongly on the complexity of the value chain, the policy environment, and ICT maturity. The IT and R&D functions are most sensitive to offshoring.

Keywords: Labour demand; Offshoring; Outsourcing; Regulation; Structural changes; Technology (search for similar items in EconPapers)
JEL-codes: F16 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11151-020-09771-1

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