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IT outsourcing - A source of innovation? Microeconometric evidence for Germany

Irene Bertschek and Daniel Erdsiek ()

No 12-088, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Do firms sourcing out IT services redirect their resources to innovation activity? We attempt to answer this question by analysing a firm-level data set comprising 1453 firms from the German manufacturing and services sectors. Using different measures of IT outsourcing (ITO), the econometric estimations reveal a significant and U-shaped relationship between ITO and product innovation activity of manufacturing firms, and a significant and hump-shaped relationship between ITO and process innovation activity of services firms. A propensity score matching analysis takes account of reverse causality; the results underpin the relevance of ITO for services firms' realisation of process innovation.

Keywords: IT outsourcing; product innovation; process innovation; firm-level data (search for similar items in EconPapers)
JEL-codes: D22 L23 O31 (search for similar items in EconPapers)
Date: 2012
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Journal Article: IT Outsourcing—A Source of Innovation? Microeconometric Evidence for Germany (2017) Downloads
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