International Outsourcing And Productivity

With the development of economic globalization and the changes of production structure, international outsourcing has gotten rapid development by taking importing of intermediate products as the main feature, and has become a new growth point of international trade. As a developing country, on the one hand, China undertakes some production of intermediate inputs such as parts and raw materials from developed countries, which is based on the perspective of the country to undertake outsourcing; On the other hand, Chinese enterprises entrust some inefficient production processes to foreign firms to complete, which is from the perspective of contracting states. International outsourcing in this dissertation mainly refers to the study of China's industrial sectors take the the main production processes which lack of comparative advantages to be completed abroad from the perspective of contracting states.Productivity can often be divided into labor productivity and total factor productivity. There are much mechanisms and channels through which international outsourcing affects the productivity:Outsourcing of inefficient processes abroad can make the effect of comparative advantages to be played, and can obtain efficiency gains; outsourcing makes the restructuring of labor skills, remaining workers will become more efficient; importing of intermediate goods is the main transferring channel through which the embodied technology diffusion happens, the competition along with import can lead to technology innovation and efficiency promotion; import enterprises have more chances to integrate into the international markets, and learn the advanced management experience and negotiation abilities from foreign companies, so the effect of "learning by doing" can also lead to productivity gains; importing of diverse intermediate products can enhance efficiency through the effect of increasing variety of inputs.This dissertation focuses on the productivity effect of international outsourcing. First of all, from the perspective of contracting states, the dissertation estimates the the extent of participation in international outsourcing and change features of 34 industrial sectors during the period from 1997 to 2006. In particular, this dissertation tries to measure the material outsourcing and service outsourcing of industrial sectors, and calculates the ratio of international outsourcing by grouping in accordance to different indicators.The results show that,during the period, the ratio of total outsourcing, material outsourcing and service outsourcing have enhanced steadily, but the degree of material outsourcing is significantly higher than the proportion of service outsourcing, and shows strong industrial differences.Secondly, the dissertation builds econometric model to study the effect of international outsourcing on labor productivity. The chapter makes two original contributions:The first is the distinction of the effect made by the material outsourcing and service outsourcing on labor productivity of China's industrial sectors. The second is the investigation that the nature of industrial sectors moderates the effect of international outsourcing on productivity.The results show that:International outsourcing of China's industrial sectors produces a positive role in promoting labor productivity, labor productivity effect of service outsourcing is clearly greater than that of material outsourcing, and the labor productivity effect of service outsourcing in the industries of high-tech, large-scale and low degree of openness shows even stronger than that of others.Thirdly, based on the the ultra-right cost function, the dissertation establishes the econometric model to test the effect of outsourcing on high-skilled labor demand, which is an indirect way to test the labor productivity effect of international outsourcing, and this is also a robustness test for the previous chapter's empirical analysis.The empirical results show that international outsourcing of China's industrial sectors has a positive effect on the demand for high-skilled labor. As opposed to material outsourcing, service outsourcing has more evident effect on upgrading of the skills structure, and the effect in the industries of high-tech and low degree of openness is greater. Under the premise of that marginal product of high-skilled labor is larger than that of low-skilled labor, a positive effect of international outsourcing on industrial skilled-labor demand could indicate a positive effect on labor productivity of the industry.Finally, about the effects of international outsourcing on total factor productivity, technological progress and technical efficiency, this dissertation measures total factor productivity and its decomposition indicators of China's industrial sectors through Malmquist index based on the method of DEA. And then, controlling the variables of R & D investment and FDI, the dissertation analyses the effects about the total outsourcing, material outsourcing, service outsourcing on and its decomposition indexes by using panal data model, as well as studying the industry heterogeneity about the productivity effect of international outsourcing. The results reveal that the total outsourcing, material outsourcing and service outsourcing have a positive technology spillover effect on industrial enterprises, but mainly through technical progress avenues to promote the total factor productivity, and technology spillover effect of service outsourcing is greater than that of material outsourcing. Industry group regression results show that, the technology spillover effect of international outsourcing has significant differences in different groups according to technical level, the degree of openness and scale indicators.