In this paper we present an econometric model to determine whether an SME (Small and Medium Sized Enterprise)'s probability of outsourcing depends on their levels of innovation and information and communication technology use. The predictions of the econometric model are tested by means of a LOGIT model using a cross section sample of an Argentinean SME for the year 2006. The model predicts that the level of innovation of an SME will significantly influence its probability of outsourcing. Besides, it stresses the negative incidence of the information and communication technologies (ICT) access on the outsourcing decision.
outsourcing; small and medium sized enterprises; innovation; information and communication technologies; and transaction costs
