A mechanism analysis of the impact of outsourcing in service on the total factor productivity of services industry

Abstract

Abstract: This empirical research studies the impact of four different service outsourcing in China on its total factor productivity (TFP) and further explores the impact mechanism, by using systematical generalized method of moments (GMM) based on both the WIOD and the panel data of service sector in China (2005-2010). The statistical results suggested that: (1) the TFP of service sector is negatively related with offshore outsourcing and domestic contracting while positively influenced by domestic outsourcing and offshore outsourcing; (2) offshore outsourcing and domestic contracting negatively influence the TFP through significantly impeding technique and efficiency enhancements; and (3) domestic outsourcing and offshore contracting enhance the TFP of service sector due to their positive effects on achieving technical improvements. Therefore, this research suggests that China should make more effort to improve the whole industry scale and developing ability of service sector, and reinforce the integration of service and manufacturing sectors, in order to enhance the TFP in service industry.

Key words: outsourcing, TFP, mechanism

CLC Number:

F719.9

Yao Xing, Li Biao, Wu Gang. A mechanism analysis of the impact of outsourcing in service on the total factor productivity of services industry[J]. Science Research Management, 2015, 36(4): 128-135.

References

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