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Outsourcing of peripheral services: Evidence from Spanish manufacturing plant-level data |
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| Institution: | 1. Universidad Publica de Navarra, Spain;2. Johns Hopkins Carey Business School, United States;1. Department of Economics, Auburn University, 0332 Haley Center, Auburn 36849, AL, United States;2. Department of Economics, College of William & Mary, Morton Hall 131, Williamsburg 23185, VA, United States;1. Faculty of Economics and Business, KU Leuven, Naamsestraat 69, 3000 Leuven, Belgium;2. Leuven Statistics Research Center, KU Leuven, Celestijnenlaan 200B, 3001 Leuven, Belgium;1. Department of Economics, University of Mannheim, L7 3-5, Mannheim D-68131, Germany;2. Department of Economics, Monash University, Building H4, Sir John Monash Drive, Caulfield, Vic 3145, Australia |
| Abstract: | In this paper we empirically explore outsourcing decisions of peripheral services using information from a data set of 926 Spanish manufacturing plants. We find that increases in outsourcing of peripheral services are positively correlated with increases in the plant׳s market share as well as increases in product market competition and product prices. These findings are robust to controlling for whether plants belong to single-plant or multi-plant firms. These patterns are consistent with a strategic shift in the allocation of attention to core manufacturing activities, and are at odds with traditional TCE and PRT theories of vertical integration. |
| Keywords: | Outsourcing Peripheral services Manufacturing Market share Competition |
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