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Knowledge Transfer Under Subcontracting: Evidence from Czech Firms

Alan Deardorff () and Simeon Djankov ()

Working Papers from Research Seminar in International Economics, University of Michigan

Abstract: We investigate the significance of subcontracting arrangements as a source of knowledge transfer and increased efficiency for Czech firms during 1993 through 1996. We draw on detailed enterprise surveys and interviews with the managers of 373 manufacturing firms in the Prague region. The results suggest a positive correlation between employee training and subcontracting. Subcontracting is also associated with a reduction in variable costs and a price premium on the stock market. The effect of subcontracting on other firms in the same industry is weak. A high share of subcontracting activity in a particular industry is associated with increased valuation of firms without foreign partners as investors anticipate more subcontracting arrangements.

Keywords: KNOWLEDGE TRASFER; TRADE (search for similar items in EconPapers)
JEL-codes: D24 F14 O52 P31 (search for similar items in EconPapers)
Date: 2000
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