TY  - JOUR
AU  - Bartel,Ann
AU  - Lach,Saul
AU  - Sicherman,Nachum
TI  - Outsourcing and Technological Change
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11158
PY  - 2005
Y2  - February 2005
UR  - http://www.nber.org/papers/w11158
L1  - http://www.nber.org/papers/w11158.pdf
N1  - Author contact info:
Ann P. Bartel
Graduate School of Business
Columbia University
3022 Broadway, 623 Uris Hall
New York, NY  10027
Tel: 212/854-4419
Fax: (212) 316-9219
E-Mail: apb2@columbia.edu

Saul Lach
Department of Economics
Hebrew University
Jerusalem, 91905
ISRAEL
Tel: 972-2-5883253
Fax: 972-2-5816071
E-Mail: saul.lach@huji.ac.il

Nachum Sicherman
Graduate School of Business
Columbia University
3022 Broadway, 819 Uris
New York, NY 10027
Tel: 212/854-4464
Fax: 212/854-9895
E-Mail: nachum.sicherman@columbia.edu
AB  - In this paper we argue that an important source of the recent increase in outsourcing is the computer and information technology revolution, characterized by increased rates of technological change. Our model shows that an increase in the pace of technological change increases outsourcing because it allows firms to use services based on leading edge technologies without incurring the sunk costs of adopting these new technologies. In addition, firms using more IT-intensive technologies face lower outsourcing costs of IT-based services generating a positive correlation between the IT level of the user and its outsourcing share of IT-based services. This implication is verified in the data.
ER  -