Productivity effects of business process outsourcing: a firm-level investigation based on panel data

Arbeitspapier

This paper analyses the impact of business process outsourcing (BPO) on firm productivity based on a comprehensive German firm-level panel data set covering manufacturing and service industries. The growing importance of service inputs into the production process is undisputed. Firms increasingly buy all or at least parts of selected services they need from external service providers. This is especially true for services which rely to a great extent on new information and communication technologies. Outsourcing firms can concentrate on their core competencies. Additionally, they benefit from the expertise of the external service provider. Finally, external vendors are able to provide services at lower price because of scale effects. By estimating a production function, I show that BPO has a positive and significant impact on firm-level productivity. The results are robust across different estimation techniques.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 09-088

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Contracting Out; Joint Ventures; Technology Licensing ; Industry Studies: Manufacturing: General ; Industry Studies: Services: General
• Subject: Business Process Outsourcing (BPO) ; Productivity ; Panel Data ; Olley-Pakes ; System-GMM ; Outsourcing ; Produktivität ; Unternehmensentwicklung ; Schätzung ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ohnemus, Jörg
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/30017
• Last update: 10.03.2025, 11:42 AM CET