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Global Sourcing and Technical Efficiency -  a firm-level study on the ICT industry in Sweden
Blekinge Institute of Technology, Faculty of Engineering, Department of Industrial Economics.
Blekinge Institute of Technology, Faculty of Engineering, Department of Industrial Economics.
2017 (English)In: Journal of Business Economics and Management, ISSN 1611-1699, E-ISSN 2029-4433, Vol. 18, no 5, p. 32p. 877-896Article in journal (Refereed) Published
Abstract [en]

We analyse the relationship between international sourcing, measured as imports of intermediate inputs, and the technical efficiency of firms in the information and communications technologies (ICT) manufacturing industry in Sweden. Using stochastic frontier analysis, we provide evidence that global sourcing improves firms’ capabilities to combine and re-combine inputs in productive ways, thereby increasing technical efficiency. We find a robust relationship between technical efficiency and international outsourcing. First, we find that firms that are deeply integrated into global sourcing networks are closer to their own production frontier. Second, firms that are engaged in international sourcing are also closer to the industry efficiency frontier. These findings are consistent with the argument that international sourcing stimulates firms’ capabilities by enabling them to identify and adopt higher quality inputs or more efficient production and management practices. These findings also suggest that the variety and extent of firms’ global sourcing networks constitute an important source of differences in efficiency levels among firms the ICT manufacturing industry.

Place, publisher, year, edition, pages
Elsevier, 2017. Vol. 18, no 5, p. 32p. 877-896
Keywords [en]
globalization, imports, learning, offshoring, outsourcing, recombinant capabilities, technical efficiency, technology transfer, variety
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:bth-13279DOI: 10.3846/16111699.2017.1356367ISI: 000419968000004OAI: oai:DiVA.org:bth-13279DiVA, id: diva2:1040796
Available from: 2016-10-28 Created: 2016-10-28 Last updated: 2018-02-09Bibliographically approved
In thesis
1. Firms in Global Value Chains: An Analysis of the Determinants and Effects of the Changing Location of International Production
Open this publication in new window or tab >>Firms in Global Value Chains: An Analysis of the Determinants and Effects of the Changing Location of International Production
2016 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis deals with the globalization of production, a salient feature of the modern economy. The development of international outsourcing as a widespread business practice and the simultaneous decrease in trade and transport costs have contributed to the growth of a phenomenon known as global value chains. The main aim of the thesis is to understand how global value chains alter the location of economic activity. The thesis also studies the extent of firms' participation in global value chains and its consequences for firm performance.

 

The thesis consists of four papers studying the behavior of firms in global value chains. Paper 1 analyzes how production fragmentation influences the importing and exporting behavior of Swedish firms in the manufacturing sector. Paper 2 focuses on manufacturing firms in the ICT sector and analyzes the effect of global sourcing on firm performance. In Paper 3, the thesis examines deeper implications of global production by investigating whether exposure to trade raises firms' sensitivity to external shocks. The final paper in the thesis studies the location patterns of multinational firms and analyzes the effect of institutional distance on the number of multinational entries in developing countries.

 

A number of patterns emerge from these studies. The first is that Swedish manufacturing firms increasingly participate in global value chains by sourcing production inputs from overseas to create products for local and foreign customers. As a result, global value chains help to alter the specialization patterns of manufacturing firms. The second finding is that firms reap benefits from global sourcing in the form of greater efficiency. However, global sourcing may also raise the responsiveness of firms to negative external shocks. The final key result points to a developing trend in the location of activity in which emerging market multinational firms are becoming significant sources of foreign direct investment flows and their investment patterns challenge existing theories of multinational location choice.  

 

Place, publisher, year, edition, pages
Karlskrona: Blekinge Tekniska Högskola, 2016. p. 58
Series
Blekinge Institute of Technology Doctoral Dissertation Series, ISSN 1653-2090 ; 8
Keywords
Global value chains, outsourcing, offshoring, technical efficiency, multinational firms, imports, exports, financial crisis, institutions
National Category
Economics and Business
Identifiers
urn:nbn:se:bth-13285 (URN)978-91-7295-332-1 (ISBN)
Public defence
2016-12-01, J1650, Campus Gräsvik, Karlskrona, 10:00
Opponent
Supervisors
Available from: 2016-10-28 Created: 2016-10-28 Last updated: 2016-12-16Bibliographically approved

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Stone, Trudy-AnnAndersson, Martin

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