IT Outsourcing and Firm Characteristics

Abstract

This paper seeks to identify the characteristics of firms that choose to transfer all or at least part of the fulfilment of their information technology needs to an outside party. The authors focus both on outsourcing and on offshoring. With a statistical approach, based on a large and nationally representative data set at the firm unit level, the authors look at the profiles of firms that have decided to outsource and/or offshore at least part of their ICT activities. The authors show that the firms with the most specific ICT needs choose to acquire these services from external suppliers or firms located abroad. The firms with the highest level of ICT investment are also the firms that choose to resort to outsourcing to a great extent.