Recent empirical evidences show negative relationship between outsourcing and profitability. This paper provides a theoretical explanation for this phenomenon. In an oligopoly model, we show that firms earn lower profits in the outsourcing equilibrium compared to the situation where neither firm does outsourcing, and it holds irrespective of the intensity of competition. So, outsourcing creates...

When a country interacts with foreign countries, it exposes itself to foreign culture and behaviour. This exposure could in‡uence the domestic culture through imitation or adaptation in the same way as individuals tend to be in‡uenced in their behaviour by the groups that they frequent. This could carry over to business culture in general and the corruption culture speci…cally. Therefore, the m...

S ome years ago, there was a TV advert for the Guardian newspaper, which became an advertising classic. It showed a young man, short hair, tattoo, drainpipe trousers and bovver boots, pelting towards an old man ambling his way down the street. When the lout catches up, he grabs the old man and flings him down, clearly a vicious unprovoked assault. But then the camera moves back to show the whol...