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Off-shoring and out-sourcing for shareholder value: Promise versus reality

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  • Lee, Edward
  • Yin, Ya Ping

Abstract

Corporate restructuring through off-shoring and out-sourcing is widely regarded as necessary for transforming cost structure and return on capital, particularly in situations of severe price erosion in globally competitive markets. This paper constructs an accounting framework to assess the extent to which out-sourcing and off-shoring have transformed US corporate financials. The contention in this paper is that off-shoring and out-sourcing may be necessary to maintain price competitiveness but we would add a health warning that these responses may not be sufficient to transform return on capital or shareholder value for wealth accumulation.

Suggested Citation

  • Lee, Edward & Yin, Ya Ping, 2012. "Off-shoring and out-sourcing for shareholder value: Promise versus reality," Accounting forum, Elsevier, vol. 36(1), pages 18-26.
    • Handle: RePEc:eee:accfor:v:36:y:2012:i:1:p:18-26
    DOI: 10.1016/j.accfor.2012.01.001
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    References listed on IDEAS

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    1. Andersson, Tord & Haslam, Colin & Lee, Edward & Tsitsianis, Nick, 2008. "Financialization directing strategy," Accounting forum, Elsevier, vol. 32(4), pages 261-275.
    2. Ian Gordon & Colin Haslam & Philip McCann & Brian Scott-Quinn, 2009. "Off-shoring of Work and London’s Sustainability as an International Financial Centre," Advances in Spatial Science, in: Charlie Karlsson & Ake E. Andersson & Paul C. Cheshire & Roger R. Stough (ed.), New Directions in Regional Economic Development, chapter 0, pages 373-384, Springer.
    3. Tord Andersson & Colin Haslam & Edward Lee & Nick Tsitsianis, 2008. "Financialization directing strategy," Accounting Forum, Taylor & Francis Journals, vol. 32(4), pages 261-275, December.
    4. Charlie Karlsson & Ake E. Andersson & Paul C. Cheshire & Roger R. Stough (ed.), 2009. "New Directions in Regional Economic Development," Advances in Spatial Science, Springer, number 978-3-642-01017-0.
    5. Andersson, Tord & Haslam, Colin & Lee, Edward & Katechos, George & Tsitsianis, Nick, 2010. "Corporate strategy financialized: Conjuncture, arbitrage and earnings capacity in the S&P500," Accounting forum, Elsevier, vol. 34(3), pages 211-221.
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