Outsourcing And Technological Change
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Overview: This Paper proposes that the recent increase in the outsourcing of services may be due to the use of information technology. Using industry-level data for the 1992- 1997 time period, this paper presents empirical evidence which shows a link between the usage of information technology and expenditures on outsourcing of certain services. This evidence is the motivation for the development of a model of the relationship between outsourcing and technological change. This model shows that an increase in the speed of technological change in the production of services will increase outsourcing.