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International subcontracting occurs when one firm, the prime manufacturer or contractor (“principal”), contracts with another firm, the subcontractor or “supplier”, for a given production cycle, one or more aspects of production design, processing or manufacture, or construction or maintenance work.

The output is generally incorporated into the principal’s final products. Subcontracting can also involve services, particularly studies, accounting, engineering, R&D, advertising, computer services or legal advice.

Source Publication:
OECD, 2005, Measuring Globalisation: OECD Handbook on Economic Globalisation Indicators, OECD, Paris - Glossary.

Statistical Theme: Financial statistics

Created on Monday, July 23, 2007