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1 International Fragmentation of Production and Firm Productivity: Evidence from Slovenian Manufacturing Firms
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BibTeX
@MISC{Burger_1international,
author = {Anže Burger and Matija Rojec},
title = {1 International Fragmentation of Production and Firm Productivity: Evidence from Slovenian Manufacturing Firms},
year = {}
}
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Abstract
An increasing number of firms outsource peripheral functions in order to stay focused on their core capabilities. This paper contributes to a limited body of empirical research on the relationship between intermediate inputs offshoring and firm productivity. We use a unique firm-level panel data set of Slovenian manufacturing firms operating in the period 1994–2005 with a detailed accounting information and foreign trade data. Using propensity score matching techniques combined with the difference-in-differences approach, We analyze whether firms that start importing intermediate inputs become more productive. The results imply that new importers exhibit temporal boost in productivity growth and increase productivity level relative to non-importing control group over a medium term. In the first year, offshoring brings about a 20 % increase in labour productivity and an equivalent growth of total factor productivity. Despite the short-lived year-on-year growth rates of productivity in excess of non-importers, cumulative gain in productivity of new importers after four years remains significant at around 37 % for labour productivity and 35 % for total factor productivity.
Keyphrases
firm productivity slovenian manufacturing firm international fragmentation new importer total factor productivity intermediate input labour productivity limited body foreign trade data propensity score short-lived year-on-year growth rate core capability productivity growth unique firm-level panel data set first year empirical research temporal boost detailed accounting information productivity level cumulative gain equivalent growth medium term non-importing control group peripheral function difference-in-differences approach
