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Outsourcing of Accounting Tasks in SMEs: An extended TCE Model

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  • P. EVERAERT

    ()

  • G. SARENS

    ()

  • J. ROMMEL

Abstract

This study explores why small and medium-sized companies (SMEs) engage in outsourcing of accounting services. We expand the transaction cost economics model by adding the variable resource deficit from resource-based theory, while controlling for personal characteristics of the SME executive (age, education), organizational structure, firm maturity and ownership structure. We find that resource deficit, asset specificity and frequency are the most significant drivers of outsourcing intensity with respect to accounting. Furthermore, the educational background of the CEO seems to play an important role, as well as the presence of a separate CFO function within the firm.

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File URL: http://www.feb.ugent.be/nl/Ondz/wp/Papers/wp_06_409.pdf
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Bibliographic Info

Paper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 06/409.

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Length: 11 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:rug:rugwps:06/409

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Related research

Keywords: outsourcing; accounting; SME; transaction-cost theory; resource-based theory;

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References

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  2. Hennart, J.-F., 1994. "The 'comparative institutional' theory of the firm : some implications for corporate strategy," Open Access publications from Tilburg University urn:nbn:nl:ui:12-174427, Tilburg University.
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  4. Van der Stede, Wim A. & Young, S. Mark & Chen, Clara Xiaoling, 2005. "Assessing the quality of evidence in empirical management accounting research: The case of survey studies," Accounting, Organizations and Society, Elsevier, vol. 30(7-8), pages 655-684.
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  8. L.A.A. Van den Berghe & Steven Carchon, 2002. "Corporate Governance Practices in Flemish Family Businesses," Corporate Governance: An International Review, Wiley Blackwell, vol. 10(3), pages 225-245, 07.
  9. Erin Anderson & Hubert Gatignon, 1986. "Modes of Foreign Entry: A Transaction Cost Analysis and Propositions," Journal of International Business Studies, Palgrave Macmillan, vol. 17(3), pages 1-26, September.
  10. John, George & Weitz, Barton A, 1988. "Forward Integration into Distribution: An Empirical Test of Transaction Cost Analysis," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(2), pages 337-55, Fall.
  11. JS Armstrong & Terry Overton, 2005. "Estimating Nonresponse Bias in Mail Surveys," General Economics and Teaching 0502044, EconWPA.
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