Offshoring offers managers the promise of substantial economic benefits, but also comes with the risk of increased complexity and coordination challenges. We argue that offshoring firms must accumulate architectural knowledge to keep the cost of coordination of the geographically separated activities at bay. Based on a simulation model that examines the performance implications of firms’ learni...

The paper investigates the relationship between offshoring, wages, and the ease with which individuals' tasks can be offshored. Our analysis relates to recent theoretical contributions arguing that there is only a loose relationship between the suitability of a task for offshoring and the associated skill level. Accordingly, wage effects of offshoring can be very heterogeneous within skill grou...

How many "American jobs" have U.S.-born workers lost due to immigration and offshoring? Or, alternatively, is it possible that immigration and offshoring, by promoting cost-savings and enhanced efficiency in firms, have spurred the creation of jobs for U.S. natives? We consider a multi-sector version of the Grossman and Rossi-Hansberg (2008) model with a continuum of tasks in each sector and we...

Reshoring refers to the emerging practice of once-offshoring manufacturers moving their factories back onshore. Conventional wisdom suggests that reshoring offers demand responsiveness due to market proximity, whereas offshoring provides lower cost. We however argue that, if a manufacturer remains heavily dependent on offshore suppliers for component sourcing, moving its factory back onshore ma...

This paper presents a specific factor model of a small open economy to show the factor price effect and welfare effect of offshoring. Different to ambiguous wage effect conclusions of offshoring under Heckscher-Ohlin framework, the conclusions of this paper is clear-cut. Offshoring will benefit specific factor (skilled labour and land), hurts some non-specific factor (unskilled labour), and enl...

This paper aims to show the evolution of offshore outsourcing from a different viewpoint. In particular, it will be focusing on the offshore outsourcing in East Asian countries, especially in China, Vietnam and Japan. In spite of relatively short period of offshoring experiences, East Asian countries, however, are undergoing the shift in formulating and implementing offshore software outsourcin...

Transnational corporations (TNCs) are playing a major role in global R&D, not only through activities in their home countries but also increasingly abroad. However, the process of R&D offshoring is not yet discussed thoroughly. Based on in-depth case study on Agilent China Communications Operation, this paper presents a stage model for theorizing the R&D offshoring process. This stage model out...

Conventional offshoring with requirements engineering onshore and implementation offshore is not very agile. Problems often arise in the transfer of requirements and knowledge and in the quality of the developed system. Agile offshoring may be a solution for these problems. But its application involves risks. In this paper common challenges of collaboration in agile offshoring projects are pres...

Recently, thousands of companies have chosen to relocate their business processes from home country another country. The relocation process is usually called offshoring. Offshoring has made many controversial debates among economists. Discussing the effects it been focus a large number research papers. By using SWOT analysis, this paper investigates influence offshoring on both sides and develo...

In this paper, in order to study the impact of offshoring on sectoral and economywide rates of unemployment, we construct a two sector general equilibrium model in which labor is mobile across the two sectors, and unemployment is caused by search frictions. We find that, contrary to general perception, wage increases and sectoral unemployment decreases due to offshoring. This result can be unde...