Global Sourcing Decisions and Firm Productivity: Evidence from Spain

Wilhelm Kohler and Marcel Smolka

No 2903, CESifo Working Paper Series from CESifo

Abstract: We investigate the link between productivity of firms and their sourcing behavior. Following Antràs & Helpman (2004) we distinguish between domestic and foreign sourcing, as well as between outsourcing and vertical integration. A firm’s choice is driven by a hold-up problem caused by lack of enforceable contracts. We use Spanish firm-level data to examine the productivity premia associated with the different sourcing strategies. We find strong empirical support for the predictions of the model.

Keywords: productivity; outsourcing; intra-firm trade; foreign direct investment; incomplete contracts; firm-level data (search for similar items in EconPapers)
JEL-codes: F14 F23 L22 L23 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (48)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2903

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