Outsourcing and Productivity:a Comparison between Material and Service Outsourcing in China

This paper uses input-output tables to measure material and service outsourcing on industry level and to estimate the effects of the two kinds of international outsourcing on productivity. The results show that both material outsourcing and service outsourcing are positively associated with productivity,with far greater stimulation effects of service outsourcing than material outsourcing. When contemplating the difference of factor intensity among industries,we find that both material and service outsourcing show superior stimulation effects in capital-intensive industries than in labor-intensive ones,and this difference is more remarkable with service outsourcing.