Technological diffusion, the diffusion of skill and the growth of outsourcing in US manufacturing

Elisabetta Magnani

Economics of Innovation and New Technology, 2006, vol. 15, issue 7, 617-647

Abstract: What drives the observed rapid growth of outsourcing in US manufacturing? This article approaches this question by asking whether technological diffusion driven by R&D spillovers is in part responsible for the growth of atypical work arrangements in the USA. Relying on data of technological diffusion since the early 1970s, this study provides some evidence that technological factors may have contributed to the spread of outsourcing. When sample composition effects are accounted for, technological innovation reduces outsourcing in high-tech industries. Furthermore, this study highlights the importance of distinguishing between 'rent' and 'pure knowledge' spillovers. Rent spillovers are positively correlated with outsourcing, whereas pure knowledge spillovers usually decrease the incentive to outsource. Support to the technological diffusion hypothesis is also found, particularly in a sample of high-tech industries after 1980, in which rapid diffusion of IT technologies is notoriously witnessed. Alternative hypotheses are better applied to low-tech industries.

Keywords: Outsourcing; Technological diffusion; Firm-specific human capital; Market-mediated employment arrangements (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/10438590600665120 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ecinnt:v:15:y:2006:i:7:p:617-647

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GEIN20

DOI: 10.1080/10438590600665120

Access Statistics for this article

Economics of Innovation and New Technology is currently edited by Professor Cristiano Antonelli

More articles in Economics of Innovation and New Technology from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().