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Web use and offshoring

Aoife Hanley and Ingrid Ott

No 1537, Kiel Working Papers from Kiel Institute for the World Economy (IfW)

Abstract: Formulating a model which summarises transportation costs, uncertainty and price, we describe how a switch to ICT procurement can impact more readily procured services rather than materials. Uncertainty represents a catch-all factor describing the dovetailing of operations between two neither culturally nor geographically proximate, independent firms. Using a 3-year panel, we find that ICT 'switchers' report increases in services offshored by between 1.9 and 1.6 percent. Uniquely, we also report a 2-3 percent reduction in the level of materials offshoring following a switch to internet procurement.

Keywords: Offshoring; heterogeneous inputs; uncertainty; price; transportation costs (search for similar items in EconPapers)
Date: 2009
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