Outsourcing business services and the role of central administrative offices

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43 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)377-395
Number of pages19
JournalJournal of Urban Economics
Volume53
Issue number3
DOIs
Publication statusPublished - 2003 May
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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