Advanced Search
MyIDEAS: Login to save this paper or follow this series

To Offshore or Nearshore IT services? An investigation using transaction cost theory

Contents:

Author Info

  • Julia Trampel

    (Institute for Cooperative Systems of the University Muenster)

Registered author(s):

    Abstract

    The phenomenon of offshoring, that is, the outsourcing of highly- qualified services into low wage countries was until now considered an economy-specific solution to counteract the constant rise in costs caused by the intensified global competition. At the same time, this form of cross-country division of labor had been prognosticated by various studies to lead to overall positive economic effects. Recently, however, there has been much discussion in the political and management ranks on the controversial issue of the advantageousness of offshoring. The trend, which has been enforced by numerous consultants, has led to a decline in domestic employment as well as not accomplishing cost savings thus intensifying doubt over its validity. The following paper deals with the advantageousness of offshoring in the case of IT services. In order to detach oneself from the limited account given by looking at wage costs, the analysis is conducted from the viewpoint of transaction cost theory. In doing so, it constantly distinguishes between offshoring and nearshoring strategies and the alternatives in examining specific costs are weighed out against each other. It will be shown that relevant motivation and coordination costs vary depending on not only geographical distance but also cultural difference. As such, the role of effective cooperation and interface management is clarified in order to be able to reduce known transaction costs.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://128.118.178.162/eps/io/papers/0406/0406001.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by EconWPA in its series Industrial Organization with number 0406001.

    as in new window
    Length: 16 pages
    Date of creation: 02 Jun 2004
    Date of revision:
    Handle: RePEc:wpa:wuwpio:0406001

    Note: Type of Document - pdf; pages: 16
    Contact details of provider:
    Web page: http://128.118.178.162

    Related research

    Keywords: interational outsourcing; offshoring; nearshoring; transaction costs;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Benoit A. Aubert & Michel Patry & Suzanne Rivard, 1998. "Assessing the Risk of IT Outsourcing," CIRANO Working Papers 98s-16, CIRANO.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpio:0406001. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.