Outsourcing and offshoring of business services: how important is ICT?

Rachel Griffith, Department of Economics, University College London

This paper considers the impact that technology has on firms' choices over
organisational form, in particular whether to produce inhouse or outsource
and offshore services, and firms' decision over the location of activity.
Technology reduces the transaction and adjustment costs of moving activity
outside the firm and of carrying out at greater geographic distance. We
find that more technology intensive firms purchase a greater amount of
services on the market and purchase more offshore than less technologically
intensive firms.

Date: 04 October-00 0000