Outstanding Outsourcers: A Firm- and Plant-Level Analysis of Production Sharing
January 2006
Working Paper Number:
CES-06-02
Abstract
This paper examines the differences in characteristics between outsourcers and nonoutsourcers with a particular focus on productivity. The measure of outsourcing comes from a question in the 1987 and 1992 Census of Manufactures regarding plant-level purchases of foreign intermediate materials. There are two key findings. First, outsourcers are 'outstanding.' That is, all else equal, outsourcers tend to have premia for plant and firm characteristics, such as being larger, more capital intensive, and more productive. One exception to this outsourcing premia is that wages tend to be the same for both outsourcers and non-outsourcers. Second, outsourcing firms, but not plants, have significantly higher productivity growth.
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production,
manufacturing,
export,
produce,
exporter,
multinational,
econometrician,
outsourcing,
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Census of Manufactures,
Annual Survey of Manufactures,
Standard Industrial Classification,
Longitudinal Research Database,
National Science Foundation,
Total Factor Productivity,
Federal Reserve Bank,
Federal Reserve System,
Census of Manufacturing Firms,
Economic Census,
University of Michigan
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