To ensure that we capture as many deals as possible, we use
various combinations of keywords such as outsourcing,
contract, information technology, and so on. We matched the
IT outsourcing deals with the IT investment data in the CII
database and with financial data for the years in which the IT
outsourcing arrangement occurs, resulting in 97 IT outsourcing
arrangements for the set of firms in our database.18
Then, we identify a set of firms that have not outsourced from
the CII database. We do not allow for repeating firms in the
sample given that our estimation strategy is best suited to a
cross-sectional context. This provides us with 520 nonoutsourcing
firms. Taken together, our data set consists of a
total of 617 unique firms classified as outsourcing and nonoutsourcing
firms.19