Outsourcing business services and the role of central administrative offices

doi:10.1016/S0094-1190(03)00006-8

Journal of Urban Economics

Volume 53, Issue 3, May 2003, Pages 377-395

https://doi.org/10.1016/S0094-1190(03)00006-8 Get rights and content

Abstract

In this paper, I study whether there is any evidence that the market scale surrounding a central administrative office (CAO) has any relation to a firm's cost-effectiveness in procuring business services. By linking plant-level data from the 1992 Annual Survey of Manufactures with CAO information from the Survey of Auxiliary Establishments, I examine manufacturing plants' practice of outsourcing services in relation to the size of the local service market surrounding the plant and that surrounding the plant's CAO. I found evidence which suggests that the greater the size of local market surrounding a CAO, the higher the plant's probability of relying on the CAO for outsourcing advertising, bookkeeping and accounting, and legal services.

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Outsourcing business services and the role of central administrative offices

Abstract

Journal of Urban Economics

Journal of Urban Economics

Product variety, Marshallian externalities, and city sizes

Journal of Regional Science

The changing corporate head office and its spatial implications

Regional Studies

Market size matters

The corporate headquarters complex in New York city

Productivity and the density of economic activity

American Economic Review

Growth in cities

Journal of Political Economy

Communication technologies and spatial organization of multi-unit firms in metropolitan areas

Regional Science and Urban Economics

Purchased services, outsourcing, computers, and productivity in manufacturing

Marshall's scale economies

Corporate headquarters relocation and changes in metropolitan corporate dominance, 1980–1987

Economic Geography

Localization of industry and vertical disintegration

Review of Economics and Statistics