Outsourcing Foreign Services and the Internet: Evidence from Firm Level Data

Authors

• Görg
• H.
• Hanley
• A.
• Ott
• I.

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We analyse the link between internet use and foreign sourcing of services and materials inputs. In our empirical analysis using firm level data for Ireland we find, among firms that a priori all purchase inputs abroad, that those who commenced outsourcing from suppliers over the Internet (‘Adopters’) experience significantly higher growth rates of services offshoring. This result shows in a variety of econometric methods (OLS, Propensity Scoring (Kernel, Nearest Neighbour and Caliper Matching)). Adopting the Internet for outsourcing induced an increase in the share of foreign services by 3.2 – 4.0%.

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