Specialized firms engaged in service offshoring contracts often face a tension between specializing in their own domain and maintaining knowledge in their partners’ domains. When knowledge is “peripheral” to a firm’s own specialty (e.g., an information technology (IT) service contractor’s knowledge of a client’s business domain or a client’s technical knowledge of a contractor’s domain), firms ...

This paper develops a dynamic general equilibrium model to analyze firms’ joint decisions on production offshoring and clean technology adoptions when facing different labor productivities and environmental regulations between home country and offshoring host country. During their decision processes, both workers’ wages and emission levels of related countries are endogenously determined. Later...

The changing economic and labor conditions have motivated firms to outsource professional services activities to skilled personnel in less expensive labor markets. This offshoring phenomenon is studied from a political, economic, technological and strategic perspective. Next, an analytical model is developed for achieving strategic advantage from offshoring based on global partnerships. The mod...

We propose an endogenous growth model with offshoring to investigate its effects on product innovation and growth in the country of origin. Offshoring is associated with reduced feedback from offshored plants to domestic labs as well as coordination problems between the offshored and domestic divisions of firms. Production and transport cost parameters affect the static decision to relocate pla...

In recent years India has become the information technology (IT) offshoring destination of choice for many Western organizations. From the perspective of vendor organizations in India, however, the IT offshoring phenomenon is more than just a business relationship with Western firms. It is also embedded within the context of the longstanding imbalances of power in the relationship between the W...

This paper summarizes the results of a descriptive meta-analysis on existing academic research in IS offshoring from 1996 to 2006. It identifies relevant research, categorizes it, and suggests future research directions. The results show that IS offshoring represents a new research area with most research being published during 2003 to 2006. Non-theory based, descriptive research designs domina...

Temporary Shocks and Offshoring: The Role of External Economies and Firm Heterogeneity We construct a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in an industry. Also, the initial advantage of a country as a potentia...

Recently, offshoring of information systems (IS) services to external vendors has seen considerable growth. Outsourcing to vendors in foreign countries brings about unique challenges which need to be understood and managed effectively. This paper explores cultural differences in IS offshoring arrangements involving German client organizations that outsource application development activities to...

This paper analyses how increased offshoring impacts on labor income risk. It is therefore distinct from a large number of studies explaining the level effects of globalization on the labor market in that it takes a look at effects on the variability of incomes. It provides an assessment that directly connects labor income risk and offshoring trends in a panel setting at the industry level. Imp...

In recent papers, Bergin, Feenstra, and Hanson (2007 & 2009, hereafter BFH) analyze the impact that offshoring has in employment and output volatility, particularly on the Mexican maquiladora industry. Their empirical results indicate that employment and output in the offshoring manufacturing plants in Mexico are more volatile than their counterparts in the U.S. Such empirical results suggest t...