The Productivity Benefits of IT Outsourcing
نویسندگان
چکیده
We examine the productivity benefits of IT outsourcing in the credit union industry, using data on the population of U.S. credit unions from 1992-2005. Within-credit union switching from internal IT to outsourced IT reduces operating costs by roughly 30%, once we control for the endogeneity of switches. Less productive firms are more likely to outsource in the crosssection, and more likely to exit. The reorganization from internal to external IT production is responsible for as much as $6 billion in annual cost savings for the industry. ∗Knittel: Department of Economics, University of California, Davis, CA and NBER. Email: [email protected]. Stango: Tuck School of Business, Dartmouth College, Hanover NH 03755. Email: [email protected].
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