Danish researchers: Not worth outsourcing to China

Dansk Industri expects fewer Danish companies to outsource to low-income countries in the future

Danish companies are going about their business wrongly when they outsource their production to cheap and low-wage markets like the ones found in China and India.

There are bigger gains to be made by outsourcing to higher-wage nations like Germany, Sweden and the UK, Danish research has found.

“My research shows that companies generally improve by outsourcing,” Roger Bandick, a lecturer at the Institute of Economics at Aarhus University, told Videskab.dk. “But if you look at which countries are being outsourced to, companies don’t see that positive effect if they outsource to low and middle-wage nations outside the OECD.”

 The yet-to-be published research – which is based on figures stemming from Danish companies in the manufacturing industry that outsourced parts of their activities in the period 1995-2006 – showed that a positive effect was gained by outsourcing to high-income nations.

Bandick’s research showed that companies outsourcing to high-wage nations enjoy 2 percent more productivity, 15 percent better product development and 20 percent increased export intensity compared to companies outsourcing to low-wage nations.

READ MORE: Once outsourced, production rarely returns to Denmark

Quality, culture and import cost
Jakob Roland Munch, a professor at the Department of Economics at the University of Copenhagen, said that Bandick’s research complements his own previous conclusions on the subject.

“All in all, there are still Danish companies that will find it optimal to offshore to China, but most will likely experience that offshoring to European countries is more beneficial,” Munch said.

Bandick and Munch argue that there are three central reasons why companies can gain more by outsourcing to Europe rather than China.

They argue that the quality of the products are better in Europe, while the closer to Denmark the parts needed for the products are found, the lower the costs associated with importing them to Denmark.

Finally, nations far away from Denmark probably have a different culture, other regulations and perhaps communicate with one another differently, thereby making business dealings more difficult and cost-inefficient.

Industry advocate Dansk Industri agreed with the two academics and said that it expects fewer Danish companies to outsource to low-income countries in the future.




  • Danish universities increase security checks on researchers from China, Russia, and Iran, reports DR

    Danish universities increase security checks on researchers from China, Russia, and Iran, reports DR

    Danish universities, especially Aarhus University, now rigorously screen researchers from China, Russia, and Iran to prevent espionage, following recommendations and increasing concerns about security, reports DR

  • Danish Originals S7E5: Camilla Stærk

    Danish Originals S7E5: Camilla Stærk

    This week, Bonderup-born, London-trained, New York-based Danish designer Camilla Stærk talks about her work, anchored against a strong foundation of her Danish heritage combined with her fascination with Old Hollywood and film noir, and expressed in what she describes as the whole universe: of fashion, furniture, lighting, rugs, accessories

  • Young Copenhageners supply study grants by selling cocaine

    Young Copenhageners supply study grants by selling cocaine

    In recent years, the spread of cocaine has accelerated. The drug is easily accessible and not only reserved for wealthy party heads. Copenhagen Police have just arrested ten young people and charged them with reselling cocaine

  • 5 Mistakes I Made When I Moved to Denmark

    5 Mistakes I Made When I Moved to Denmark

    Here are five mistakes I made that helped me understand that belonging isn’t a strategy—it’s a practice. This isn’t a story of struggle—it’s a reflection on growth, told through the lens of emotional intelligence.

  • Analysis shows that many students from Bangladesh are enrolled in Danish universities

    Analysis shows that many students from Bangladesh are enrolled in Danish universities

    Earlier this year, the Danish government changed the law on access for people from third world countries to the Danish labor market. Yet, there may still be a shortcut that goes through universities

  • Danish Flower company accused of labor abuse in Türkiye

    Danish Flower company accused of labor abuse in Türkiye

    Queen Company, a Denmark-origin flower producer with pristine sustainability credentials, is under fire for alleged labor rights violations at its Turkish operation, located in Dikili, İzmir. Workers in the large greenhouse facility have been calling decent work conditions for weeks. The Copenhagen Post gathered testimonies from the workers to better understand the situation

Connect Club is your gateway to a vibrant programme of events and an international community in Denmark.


  • “It’s possible to lead even though you don’t fit the traditional leadership mold”

    “It’s possible to lead even though you don’t fit the traditional leadership mold”

    Describing herself as a “DEI poster child,” being queer, neurodivergent and an international in Denmark didn’t stop Laurence Paquette from climbing the infamous corporate ladder to become Marketing Vice President (VP) at Vestas. Arrived in 2006 from Quebec, Laurence Paquette unpacks the implications of exposing your true self at work, in a country that lets little leeway for individuality

  • Deal reached to bring more foreign workers to Denmark

    Deal reached to bring more foreign workers to Denmark

    Agreement between unions and employers allows more foreign workers in Denmark under lower salary requirements, with new ID card rules and oversight to prevent social dumping and ensure fair conditions.

  • New association helps international nurses and doctors Denmark

    New association helps international nurses and doctors Denmark

    Kadre Darman was founded this year to support foreign-trained healthcare professionals facing challenges with difficult authorisation processes, visa procedures, and language barriers, aiming to help them find jobs and contribute to Denmark’s healthcare system