International Outsourcing Ratio of China Industrial Sectors: How Measurement Matters

The paper uses three methods estimating material outsourcing ratio and service outsourcing ratio of China´s 36 industrial sectors in 1997, 2002 and 2007. Then we investigate the quality of the three methods through the Shift-Share method. This study is useful for related empirical studies on outsourcing. We find that different methods lead to a big difference of outsourcing ratio. The results show an upward trend of China´s industrial sector outsourcing ratio during 1997-2007, and the growth rate of service outsourcing is higher than material outsourcing; structural changes have a greater impact on the material outsourcing ratio than the services outsourcing ratio.