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International Outsourcing Hurdles in Value-added Services


  • Arindam Banerjee



International Outsourcing has been traditionally looked upon as a low end cost effective servicing option to take advantage of the cost arbitrage that exists across countries. Of late, many outsourcing vendors have realized that the advantages of cost differentials that spurred a lot of the global outsourcing business in the past 20 years will disappear in the medium term. This paper provides a perspective about how much value addition, besides cost, traditional outsourcing vendors can provide and what may be the facilitator/ inhibitors of such activities. To substantiate the claim, a brief case describing the setting up of an offshore analytics operation is presented which gives a back drop to the challenges faced in relatively high end value creation processes in a remote outsourced environment. [W.P. No. 2008-06-03]

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  • Arindam Banerjee, 2010. "International Outsourcing Hurdles in Value-added Services," Working Papers id:2667, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:2667
    Note: Institutional Papers

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    References listed on IDEAS

    1. Jagdish Bhagwati & Arvind Panagariya, 2004. "The Muddles over Outsourcing," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 93-114, Fall.
    2. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    3. Barbara Spencer, 2005. "International outsourcing and incomplete contracts," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1107-1135, November.
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    International Outsourcing; Offshoring; Value addition; competitive advantage;

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