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Global sourcing and technical efficiency–a firm-level study on the ICT industry in Sweden

Andersson, Martin LU and Stone, Trudy Ann (2017) In Journal of Business Economics and Management 18(5). p.877-896
Abstract

We analyse the relationship between international sourcing, measured as imports of intermediate inputs, and the technical efficiency of firms in the information and communications technologies (ICT) manufacturing industry in Sweden. Using stochastic frontier analysis, we provide evidence that global sourcing improves firms’ capabilities to combine and re-combine inputs in productive ways, thereby increasing technical efficiency. We find a robust relationship between technical efficiency and international outsourcing. First, we find that firms that are deeply integrated into global sourcing networks are closer to their own production frontier. Second, firms that are engaged in international sourcing are also closer to the industry... (More)

We analyse the relationship between international sourcing, measured as imports of intermediate inputs, and the technical efficiency of firms in the information and communications technologies (ICT) manufacturing industry in Sweden. Using stochastic frontier analysis, we provide evidence that global sourcing improves firms’ capabilities to combine and re-combine inputs in productive ways, thereby increasing technical efficiency. We find a robust relationship between technical efficiency and international outsourcing. First, we find that firms that are deeply integrated into global sourcing networks are closer to their own production frontier. Second, firms that are engaged in international sourcing are also closer to the industry efficiency frontier. These findings are consistent with the argument that international sourcing stimulates firms’ capabilities by enabling them to identify and adopt higher quality inputs or more efficient production and management practices. These findings also suggest that the variety and extent of firms’ global sourcing networks constitute an important source of differences in efficiency levels among firms the ICT manufacturing industry.

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Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
globalization, imports, learning, offshoring, outsourcing, recombinant capabilities, technical efficiency, technology transfer, variety
in
Journal of Business Economics and Management
volume
18
issue
5
pages
20 pages
publisher
Taylor & Francis
external identifiers
  • scopus:85032464280
ISSN
1611-1699
DOI
10.3846/16111699.2017.1356367
language
English
LU publication?
yes
id
b11b2f0e-6e4b-4e70-b2ff-26eb8b4e430b
date added to LUP
2017-11-08 10:55:52
date last changed
2018-01-07 12:25:24
@article{b11b2f0e-6e4b-4e70-b2ff-26eb8b4e430b,
  abstract     = {<p>We analyse the relationship between international sourcing, measured as imports of intermediate inputs, and the technical efficiency of firms in the information and communications technologies (ICT) manufacturing industry in Sweden. Using stochastic frontier analysis, we provide evidence that global sourcing improves firms’ capabilities to combine and re-combine inputs in productive ways, thereby increasing technical efficiency. We find a robust relationship between technical efficiency and international outsourcing. First, we find that firms that are deeply integrated into global sourcing networks are closer to their own production frontier. Second, firms that are engaged in international sourcing are also closer to the industry efficiency frontier. These findings are consistent with the argument that international sourcing stimulates firms’ capabilities by enabling them to identify and adopt higher quality inputs or more efficient production and management practices. These findings also suggest that the variety and extent of firms’ global sourcing networks constitute an important source of differences in efficiency levels among firms the ICT manufacturing industry.</p>},
  author       = {Andersson, Martin and Stone, Trudy Ann},
  issn         = {1611-1699},
  keyword      = {globalization,imports,learning,offshoring,outsourcing,recombinant capabilities,technical efficiency,technology transfer,variety},
  language     = {eng},
  month        = {09},
  number       = {5},
  pages        = {877--896},
  publisher    = {Taylor & Francis},
  series       = {Journal of Business Economics and Management},
  title        = {Global sourcing and technical efficiency–a firm-level study on the ICT industry in Sweden},
  url          = {http://dx.doi.org/10.3846/16111699.2017.1356367},
  volume       = {18},
  year         = {2017},
}