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A Matter of Coherence: The Effects of Offshoring of Intangibles on Firm Performance

Author

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  • Federica Ceci
  • Francesca Masciarelli

Abstract

Offshoring of intangibles is a global production strategy based on the decision to externalize intangible activities to foreign countries. In the present work we test the existence of a positive relationship between offshoring intangibles and firm performance. To reap the full benefit of offshoring, firms are required to integrate and coordinate activities and knowledge; integration and coordination become difficult when activities are knowledge intensive as in the case of intangibles. We argue that the positive relation between offshoring intangibles and performance is strengthened if firms retain part of the knowledge related to the offshore outsourced activity, which reduces the risk of knowledge fragmentation and eases coordination and control. Our analysis suggests that some coherence between what a firm outsources abroad and what it offers positively moderates the relationship between offshoring intangible activities and firm performance.

Suggested Citation

  • Federica Ceci & Francesca Masciarelli, 2010. "A Matter of Coherence: The Effects of Offshoring of Intangibles on Firm Performance," Industry and Innovation, Taylor & Francis Journals, vol. 17(4), pages 373-392.
  • Handle: RePEc:taf:indinn:v:17:y:2010:i:4:p:373-392
    DOI: 10.1080/13662716.2010.496244
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    Citations

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    Cited by:

    1. Gavin Murphy & Iulia Siedschlag, 2015. "Determinants of R&D offshoring," JRC Working Papers on Corporate R&D and Innovation 2015-02, Joint Research Centre (Seville site).
    2. Ceci, Federica & Prencipe, Andrea, 2013. "Does Distance Hinder Coordination? Identifying and Bridging Boundaries of Offshored Work," Journal of International Management, Elsevier, vol. 19(4), pages 324-332.
    3. Stefano Elia & Rajneesh Narula & Silvia Massini, 2015. "Disentangling the Role of Modularity and Bandwidth in Entry Mode Choice: The Case of Business Services Offshoring," John H Dunning Centre for International Business Discussion Papers jhd-dp2015-06, Henley Business School, Reading University.
    4. Valle, Sandra & García, Francisco & Avella, Lucía, 2015. "Offshoring Intermediate Manufacturing: Boost or Hindrance to Firm Innovation?," Journal of International Management, Elsevier, vol. 21(2), pages 117-134.

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