IDEAS home Printed from https://ideas.repec.org/a/igg/jgim00/v20y2012i2p25-43.html
   My bibliography  Save this article

Impact of Vendor Selection on Firms’ IT Outsourcing: The Korea Experience

Author

Listed:
  • Jae-Seung Han

    (Hanyang University, Korea)

  • Sang-Yong Tom Lee

    (Hanyang University, Korea)

Abstract

Information technology (IT) outsourcing is often used as a cost-saving strategy for firms. In IT outsourcing, the choice of vendor is a key factor determining success. This study examines the impact that the choice of IT vendor has on firms’ IT outsourcing in Korea. The authors empirically analyzed the impact of certain characteristics of IT vendors on the market value of client firms in Korea using the event study methodology. First, the authors found that IT outsourcing announcements significantly increased the market value of firms. The authors also found that the market response to high asset-specific services of the IT vendor was significantly greater than the response to low asset-specific services. The authors’ results also showed that the effect of Korean vendors was greater than that of foreign vendors. However, the difference between IT outsourcing to large vendors and small vendors in Korea was not significant, in contrast to the US. The information provided in this study can be used by client firms to select better IT vendors and by IT vendors to develop strategies to survive the rapidly changing IT outsourcing market in Korea.

Suggested Citation

  • Jae-Seung Han & Sang-Yong Tom Lee, 2012. "Impact of Vendor Selection on Firms’ IT Outsourcing: The Korea Experience," Journal of Global Information Management (JGIM), IGI Global, vol. 20(2), pages 25-43, April.
  • Handle: RePEc:igg:jgim00:v:20:y:2012:i:2:p:25-43
    as

    Download full text from publisher

    File URL: http://services.igi-global.com/resolvedoi/resolve.aspx?doi=10.4018/jgim.2012040102
    Download Restriction: no

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:igg:jgim00:v:20:y:2012:i:2:p:25-43. 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: (Journal Editor). General contact details of provider: https://www.igi-global.com .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.