Innovation Offshoring,Institutional Context and Innovation Performance: A Meta‐Analysis

Innovation offshoring (IO) has become a widespread management practice. Yet, evidence on the performance implications is inconsistent, and scattered across disciplines and contexts. We argue that the benefits firms can derive from IO depend on the institutional environment at home. Drawing on recent work on institutional theory in international business, we explore institutions that facilitate reverse knowledge transfer and/or institutional arbitrage with respect to innovation‐related activities. The results of our meta‐analysis that synthesizes evidence from 48 samples show that IO is related positively to innovation performance. As predicted, this relationship is moderated by differences in the institutional environments across countries. Specifically, when national innovation systems are weak at home, IO appears to enable institutional arbitrage strategy whereas Confucian cultures enable more effective reverse knowledge transfer. However, contrary to our expectations, the beneficial effects of IO appear to have diminished over time.     

The impact of production offshoring on the skill composition of manufacturing firms: evidence from Italy

In this work we explore how the international outsourcing of production impacts the skill composition of employment within Italian manufacturing firms. In particular, our aim is to assess whether the choice to offshore production activities to cheap‐labour countries implies a bias in the employment of skilled workers relative to unskilled ones.

Using a balanced panel of firms covering the period 1995–2003, we set up a counterfactual analysis in which, by using a difference‐in‐differences propensity score matching estimator, we compare the dynamics of skill demand for treated and control firms while addressing the possible problem of selection bias.

Our results identify a ‘potential’ skill bias effect of production offshoring. In particular, we find that treated firms tend to show an upward shift in the skill ratio with respect to the counterfactual sample, but coefficients are not significantly different from zero. When we look at the elements of the skill ratio separately, we find that the skill bias is driven by a fall in the employment of production workers (blue collars), rather than by the increase in the employment of non‐production workers (white collars), thus providing further evidence on the unskilled labour‐saving nature of international outsourcing.     

Employment Effects of Offshoring across Sectors and Occupations in Japan

In the case of Japan, the studies conducted so far focus alone on firm‐level data and delve into the productivity effects and the skill upgrading between skilled and unskilled workers. Here, we carry out an empirical analysis of the employment effects of offshoring for Japanese industries on a broader classification of skills or occupations, while considering the three major sectors of the economy and taking account of both services and materials offshoring. The results suggest that various types of offshoring affect occupations differently. In particular, services offshoring tends to benefit highly skilled occupations more, while materials offshoring tends to benefit production workers instead.     

Property rights and international investment in information technology services

Many modern information technology services are increasingly being produced in a host country to serve clients in an offshore location. As a result, the internationalization of service functions is beginning to resemble that of their more traditional manufacturing counterparts. This paper examines the role of formal and de facto property rights protection in the offshore location choice of information technology services. I also explore the role of a firm's global subsidiary network and its experience with similar property rights regimes. Using investment data based on 152 firms and their international information service investments between 2002–2006, the empirical results highlight the role of de facto property rights protection and related experience in location choice.Copyright © 2012 John Wiley & Sons, Ltd.     

ONLINE FREE MARKETS AND ENTREPRENEURSHIP IN THE MUSLIM WORLD

For centuries, networks of free exchange enabled populations of the Islamic world to thrive. Today, by contrast, the largest Muslim countries lag in international measures of economic freedom. At this critical time, hundreds of online markets for 'telework' are bringing global business opportunities within reach of many in the Muslim and non-Muslim worlds alike. Individuals with internet access can directly engage in the global online economy without having to wait for the results of domestic policy liberalisation or needing to relocate in search of higher wages.     

离岸服务战略重塑跨国公司的竞争优势

由于信息技术的发展,越来越多的服务产品变成可分割的,从而增加了服务的可贸易性。这种变革促使制造业跨国公司将其服务活动离岸经营或进行国际外包,而服务型跨国公司扩张的可能性也大大增加了。离岸服务战略的实施重塑了各类跨国企业的竞争优势,提高了全球化条件下企业的国际竞争力。     

Internationalization of services: The case of intra‐multinational enterprise trade

Increased tradability of services, made possible by the information and communications technology (ICT) revolution, has been at the heart of the internationalization of services. Although rapid growth of the services trade between parents of multinational enterprises (MNEs) and their overseas subsidiaries has contributed to the internationalization of services, empirical studies examining the determinants of intra‐MNE trade in services are few. This article, using the ownership, location, and internalization (OLI) framework, attempts to explain intra‐MNE trade in services. The results provide strong support for the OLI perspective, and posit a complementary relationship between manufacturing foreign direct investment and intra‐MNE services trade. The results also suggest the importance of subsidiaries' absorptive capacity and breadth of global connectedness for intra‐MNE trade.     

Offshoring and Reshoring: The Roles of Incomplete Contracts and Relative Bargaining Power

This paper demonstrates that an increase in bargaining power of Northern firms relative to that of their Southern contractors can trigger reshoring if the North-South wage differential is moderate, such that only industries with a high share of unskilled labor find outsourcing profitable. However, such an increase in Northern bargaining power can increase offshoring if the wage differential is so high that even industries with a low share of unskilled labor also offshore.     

Material Offshoring: Alternate Measures

Industry measures of offshoring of material inputs are often generated using the proportionality assumption applied to aggregate import data—that the import share of each commodity used in the production process for a particular industry is similar to the import share of a commodity for the total economy. This note compares estimates of offshoring for the Canadian manufacturing sector derived using this assumption to four alternatives: two measures that use direct measures of firm‐based imports, and two hybrid measures that use both input and import information. These indirect measures are compared to survey estimates that directly assess import intensity in the production process in an effort to evaluate which indirect method yields more reasonable offshoring measures.     

Factors Affecting the Offshore Deployment of Interorganizational Systems in China: A Case Study Analysis

ABSTRACT

Because of the significant market potential in China, many international enterprises are moving their production line to China. Accompanying production offshoring is the shifting of information systems to ensure that the production processes remain efficient and effective both at home and abroad. However, many enterprises encounter problems while deploying offshore information systems in China, especially when the systems are interorganizational systems (IOS) that span organizational boundaries and involve the management of relationships among participants. Therefore, this paper aims to identify critical success factors of offshore interorganizational systems in China through a case study of a supply chain relationship based on an e-procurement system between a Taiwanese personal computer manufacturer and its Chinese partners. Although this system had been well used by Taiwanese users, the performance of this system in China was relatively unsatisfactory in terms of grant complaints from Chinese users. Based on the relational view of the firm, four IOS-specific relational factors are proposed and examined: (1) IOS-specific assets, (2) IOS knowledge-sharing routines, (3) system complementarity, and (4) IOS governance. The case analysis reveals that effective IOS governance most strongly affects the results of offshoring in China, whereas system complementarity has the least influence.