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Outsourcing and Firm-level Performance

Bernd Görzig and Andreas Stephan ()

No 90, Royal Economic Society Annual Conference 2003 from Royal Economic Society

Abstract: Using firm-level panel data from the German cost structure survey over the period 1992 to 2000, our empirical analysis shows that firms that increased material inputs relative to internal labor costs performed better in terms of gross operating surplus than other firms. However, firms that increased external services relative to internal labor costs, thus outsourcing service functions previously provided within the firm, performed worse. In sum, our findings support the view that firms tend to overestimate the benefits accruing from outsourcing of services previously provided internally.

Keywords: outsourcing; firm performance; business service sector (search for similar items in EconPapers)
JEL-codes: L22 L23 C33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-ent and nep-ind
Date: 2003-06-04
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