In the context of a simple model of strategic international bisourcing, we investigate the reasons why firms may simultaneously insource and internationally outsource. We also explore the impacts of international outsourcing on the production pattern of finished goods, tradable fragment prices, and welfare. The policy implications of attempts to restrict outsourcing are also established. We sho...

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...

This paper examines the impact of the outsourcing of production on the volume and composition of the home country’s research and development. We find that outsourcing decreases the process R&D of the multinational firm in large markets when it only conducts process R&D (the substitution effect between outsourcing and process R&D). Outsourcing tends to emerge as a complementary factor to product...

This paper develops an economic model to determine the optimal degree of outsourcing by a firm and explain conditions for complete, partial, or no outsourcing decisions. It is found that for outsourcing to be profitable, it is not necessary, although sufficient, that a vendor be more efficient than the original producer. Moreover, corporate downsizing and outsourcing appear to be complementary ...

Many companies have recently been choosing information technology (IT) outsourcing in response to complicated information systems and various internal requirements. In order to monitor and maintain a high quality of IT outsourcing vendors’ services, it is necessary to develop a system to evaluate IT outsourcing customer satisfaction. The system can be used as a tool for choosing IT outsourcing ...

The concept and practice of traditional outsourcing is certainly not a new concept. Globalisation, competition and other market pressures have driven more businesses to consider using logistics provider to increase efficiency and effectiveness [11]. Many companies have successfully used traditional outsourcing to lower costs and have improved the bottom line. However, unless the company’s effor...

ExEcutIvE Summary Traditionally, little attention has been paid by hospitals to the key issues in the health information systems (HIS) outsourcing decision-making process. This is important given that the HIS outsourcing can play a key role in assisting hospitals in achieving its business objectives. However, the decision-making process of HIS outsourcing in hospitals is under-studied, especial...

In this article, we apply transaction cost theory (TCT) and institutional theory to the realm of IS outsourcing. TCT posits that firm’s outsourcing governance is influenced by transaction cost factors, namely, bounded rationality, opportunism, and risk. Institutional theory, on the other hand, has been advocated to explain non-choice behavior of organizations in the context of competitors, norm...

The literature on IT outsourcing is well-developed with distinct explanations of what may determine success. The context of IT outsourcing studies has primarily focused upon North American and European companies, seeking low-cost economies from links with developing nations to gain competitive advantage. These studies may not be generalisable to companies based in developing economies, who may ...