An empirical investigation of IT outsourcing versus quasi-outsourcing in France and Germany

An increasingly large number of firms outsource their Information Technology (IT). Firms that contemplate IT outsourcing have two alternatives: (1) contract with a vendor (i.e., outsourcing) or (2) set up their own IT subsidiary (i.e. quasi-outsourcing). This study examines some of the determinants of the outsourcing vs. quasi-outsourcing decision. Using primary data collected in France and Germany, we show that the outsourcing vs. quasioutsourcing decision is strongly influenced by both internal (i.e., asset specificity, size and internal organization of IT) and external (i.e., institutional environment) determinants.