Effects of outsourcing on labor productivity of manufacturing companies in Ecuador

The labor productivity of manufacturing companies has been a topic that has not been studied in depth in Ecuador. Labor outsourcing, although it was a public policy implemented during dollarization, and partially eliminated by 2009 for most activities, its evaluation was rather in the general framework of how this measure influenced the possibility of further flexibility in the labor market in such a way that companies can be competitive. The present study tries to establish the relationships that existed between the outsourcing and the productivity of the manufacturing companies for the period 2005-2007, as well as, it tries to establish if the social benefits that the worker perceives affect in the aggregate, to the Productivity of companies in the manufacturing sector. It is found that labor outsourcing negatively affected the labor productivity of manufacturing companies and that the profits that every worker receives, as well as social benefits, increase the productivity of manufacturing companies