IT outsourcing in Finnish business

Arbeitspapier

This paper reviews the characteristics and magnitude of information technology (IT) outsourcing as well as studies its labor productivity effects with a representative sample of Finnish businesses. Depending on the IT task in question, on average from one-third to two-thirds of IT has been outsourced; of the ten categories considered, the development of non-Internet business-to-business applications (e.g., EDI) is the leading activity in this respect. The various dimensions of IT outsourcing are all highly positively correlated. After controlling for industry and regional effects as well as characteristics of firms and their employees, it is found that an externally-supported computer user is about 20% more productive than an otherwise similar worker without a computer, which corresponds to about 5% output elasticity of outsourced IT; the effect of internally-supported computer use is not statistically significantly different for zero, and it is also several times smaller in magnitude. While the issues of causality, timing, self-selection, and unobserved firm heterogeneity are not fully addressed, the findings nevertheless suggest that IT outsourcing may have significant economic consequences.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ETLA Discussion Papers ; No. 1140

Classification and Topics

• Classification: Wirtschaft ; Organizational Behavior; Transaction Costs; Property Rights ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Transactional Relationships; Contracts and Reputation; Networks ; Contracting Out; Joint Ventures; Technology Licensing
• Subject: Labor productivity ; Information technology ; Computers ; Outsourcing ; Finnish business ; Outsourcing ; Bildschirmarbeit ; Informationstechnik ; Arbeitsproduktivität ; Lieferanten-Kunden-Beziehung ; Finnland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Maliranta, Mika ; Rouvinen, Petri ; Airaksinen, Aarno
• Event: Veröffentlichung
• (who): The Research Institute of the Finnish Economy (ETLA)
• (where): Helsinki
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/44531
• Last update: 10.03.2025, 11:42 AM CET