Kiel Working Papers, Kiel Institute for World Economics
No 1537:
Web use and offshoring
Aoife Hanley and Ingrid Ott
Abstract: Formulating a model which summarises transportation costs,
uncertainty and price, we describe how a switch to ICT procurement can
impact more readily procured services rather than materials. Uncertainty
represents a catch-all factor describing the dovetailing of operations
between two neither culturally nor geographically proximate, independent
firms. Using a 3-year panel, we find that ICT ‘switchers’ report increases
in services offshored by between 1.9 and 1.6 percent. Uniquely, we also
report a 2-3 percent reduction in the level of materials offshoring
following a switch to internet procurement
Keywords: Offshoring, heterogeneous inputs, uncertainty, price, transportation costs; (follow links to similar papers)
34 pages, July 2009
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