A Study On The Effect Of Service Outsourcing From Manufacturing Industry On Productivity Growth In Services

With the aggravation of competitions between enterprises, the manufacturing firms, which want to earn more money or control the costs or pursue reasonable resource, transfer gradually their non-focus operations to other firms. Service outsourcing from manufacturing industry as an important economic behavior has attracted increasing attention. Services outsourcing from manufacturing industry not only benefit the manufacturing sector, while the service sector have a far-reaching implications, particularly the service sector have an important impact on productivity growth.This paper first defines the types of services outsourcing, and then analyzes the reasonability of service outsourcing. We lucubrated the motives of outsourcing by two facets, one is exterior motives and the other is corporation inner motive. And about the exterior motives, we focus on the technology reason, economic reason and market reason. About inner motives, we emphasize on the reducing of cost, heightening the core competition and dispersing the risks etc. At the same time, because the service sector is labor intensive, we only focus on labor productivity. On the basis of these, we analyze the influencing mechanism of the effect of service outsourcing from manufacturing industry on productivity growth in services.We find that service outsourcing can have direct and indirect effects on service sector through theoretical analysis and modeling. Service outsourcing can have a direct effect on the service sector's output and employment, and can cause fluctuations in the service industries' labor productivity in the short term. At the same time, service outsourcing can have a indirect effect on the service sector, and can create changes in service sector's industrial structure in long term. Service outsourcing can promote the formation and development of producer services industries, and producer services industries have higher labor productivity, so service outsourcing can promote the services sector's labor productivity growth. Finally we use of the U.S. statistics to carry on the empirical analysis of the relationship between service outsourcing and service sector's productivity growth through the co-integration test and the error correction model, which verifies the conclusion of the paper to a certain degree.