Outsourcing Intensity Research Articles

Accounting outsourcing intensity in Vietnam: Empirical evidence from Vietnamese small and medium-sized enterprises

This study focuses on developing a strategic management tool for small and medium-sized enterprises (SMEs), where outsourcing is seen as an effective method. Outsourcing allows SMEs to concentrate on their core strengths and compete despite limited resources. In Vietnam, SMEs make up over ninety percent of all businesses and play a key role in the economy. However, they face challenges due to limited resources, especially in managing accounting functions. This research examines the factors influencing the level of outsourcing among SMEs in Vietnam based on two key theories: Transaction Cost Theory (TCE) and the Resource-Based View (RBV). A sample of 236 questionnaires was analyzed using SPSS and regression models. The findings revealed positive and significant relationships between outsourcing intensity (OS.Intensity) and four factors: asset specificity (AS), frequency of accounting tasks (FREQ), trust (TRUST), and technology competence (TECH). The study supports the trend of accounting outsourcing for Vietnamese SMEs, allowing them to enhance their internal strengths despite resource constraints. Future research to gain a deeper understanding of accounting outsourcing is also suggested.

A novel measure of firm-level production outsourcing

Outsourcing is a critical area of study, as related decisions account for many of the structural changes in supply chains. However, research of the causes and impacts of outsourcing has been constrained by limited measures of outsourcing intensity. Most outsourcing studies are operationalized at an industry level, or rely on data from surveys of small samples that focus on specific outsourced functions and processes. This paper proposes an industry-relative measure of firm-level production outsourcing that is easy to estimate using readily available financial reporting data. We utilize a stochastic production function to estimate the amount of each firm's output that is unaccounted for by their use of capital and labor and partition this residual into firm-specific productivity and outsourcing. Our analysis indicates that the proposed measure is valid and substantially more predictive of actual production outsourcing levels than other measures offered in the literature. This measure promises to better enable researchers to more accurately assess firm-level production outsourcing, as well as aiding their investigations into the many outsourcing antecedents, performance outcomes, and contingency effects proposed in the literature.

DETERMINANTS AND RISK-TAKING BEHAVIOUR OF OUTSOURCING INNOVATION DECISION AND INTENSITY IN VIETNAM: MAKE, PURE OR HYBRID?

This study investigates determinants and risk-taking behaviour of outsourcing innovation decision as well as the intensity in Vietnam. Outsourcing decision consists of an exclusive make (Make), buy (Pure) or a combination of both internal and external knowledge acquisition (Hybrid) in the innovation strategies. We also define outsourcing innovation intensity as the proportion of costs used for outsourcing innovation. We distinguish these outsourcing strategies in relation to product and process innovation. Based on the unique survey data in Vietnam available in 2016, we highlight the importance of the firm-specific factors such as R&D intensity, exporting status, and share of qualified employees dedicated to R&D activities; the firms’ obstacles and objectives for innovation; and the information sources of innovation on the outsourcing innovation decision and intensity. The other striking finding is that outsourcing innovation is risk-taking behaviour, but outsourcing product innovation strategy is a less risky option as compared to the outsourcing process innovation in the case of Vietnamese enterprises.

Do Labor Unions Hinder or Boost International Outsourcing? Evidence from U.S. Manufacturing

This article provides empirical evidence that labor unions can influence firms’ international outsourcing decisions in the U.S. manufacturing sector. There is a negative effect of the current level of unionism and a positive effect of the previous level of unionism on the firms’ international outsourcing intensity. Our results support the proposition put forward by Lommerud et al. (2009) that labor unions hinder firms’ international outsourcing behavior, if the decision to outsource is made no later than the wage-employment bargaining. However, stronger labor unions still induce international outsourcing if firms’ decisions are made subsequent to wage-employment bargaining.

Internal capabilities, network resources and appropriation mechanisms as determinants of R&D outsourcing

This paper contributes to an empirical validation of R&D outsourcing by integrating the influence of internal capabilities, network resources and appropriation mechanisms. Internal capabilities refer to internal R&D and human capital. Network resources account for decisions to outsource R&D which co-depend on informal incoming knowledge spillovers. Appropriation accounts for formal and informal knowledge protection mechanisms. This empirical study discusses the determinants of R&D outsourcing with respect to various theories of the firm that complement each other.Data from the Third and Fourth European Community Innovation Survey for Belgium reveal internal R&D intensity to exert a strong positive association with R&D outsourcing intensity, emphasising the importance of absorptive capacity and the complementary nature of internal and outsourced R&D. Network resources are also positively associated, suggesting that firms involved in a mixture of informal and formal networks tend to outsource relatively more R&D. In terms of appropriation mechanisms there is a positive association formal and informal protection, but this last mostly through complexity of design.

Factors Influencing Accounting Outsourcing Practices among SMEs in Pakistan Context: Transaction Cost Economics (TCE) and Resource-Based Views (RBV) Prospective

The present study was conducted to identify factors that affect Pakistani manufacturing SMEs decisions tooutsource management accounting practices in terms of transaction cost economics (TCE) and resource-basedview (RBV). A survey of 302 SMEs was carried out using convenience sampling, a personal interviewowners/managers/CFOs located in 9 major cities of Pakistan. Our multiple regression analysis revealed that thefrequency of non-routine tasks, asset specificity, opportunism, trust in accountant and competition has asignificant impact on accounting outsourcing. Furthermore, whilst we include control variables like gender,executive education, experience, firm size and firm age in our linear regression equation, the relationship amongfive variables and outsourcing intensity was remain statistically significant. The findings imply that SMEs withresource constraint should shift their traditional in-house accounting practices to the external knowledgeableprofessional accountant. Finally, this study contributes to the body of knowledge with respect to managementaccounting outsourcing, TCE and RBV in the emerging economics context.

Outsourcing and firm productivity: a production function approach

This paper is aimed at analyzing the relationship between outsourcing and productivity. Specifically, this paper deals with outsourcing at the firm level and focuses on the role of contracting out of manufacturing activities. I obtain new insights on this topic, mainly using a precise measure for outsourcing and analyzing differences across industries. Using an unbalanced panel of Spanish manufacturing firms, I estimate a production function depending on traditional inputs (labor, capital, and materials) and an index of production subcontracting. I find that for manufacturing as a whole, outsourcing intensity has a positive effect on productivity, showing an elasticity of output with respect to outsourcing around 0.15. When analyzing industry level results, I find that outsourcing intensity has a positive effect on productivity, mainly for firms belonging to light industries.

The Extent and Impact of Outsourcing: Evidence from Germany

The authors use data from several sources, including plant-level data from the manufacturing sector in Germany, to expand the literature on outsourcing. They find that, in Germany, the extent of outsourcing among manufacturing industries is higher than among service industries and that the outsourcing intensity of these industries did not change much between 1995 and 2005. They also find a statistically significantly positive impact of industry-level outsourcing intensity on German plant-level labor productivity for both 2000 and 2005. The estimated economic impact of outsourcing on plant-level productivity is also fairly significant.

Offshore outsourcing of customer relationship management: conceptual model and propositions

Customer relationship management (CRM) refers to a firm’s activities for establishing and maintaining relationships with its customers. Outsourcing refers to a firm’s contracting with another firm to perform activities that were erstwhile performed within the firm. The emergence of a low cost, high speed, global communication network and information processing network has enabled an increasing number of firms based in more industrialized market economies to outsource specific elements of their CRM to offshore vendors located in countries with significantly lower labor costs. Building on scholarly insights from multiple literature streams, we present a conceptual model delineating the antecedents and consequences of CRM offshore outsourcing intensity. We also provide a literature overview of the determinants of location choice decision for offshore outsourcing, an issue that is closely linked to the offshore outsourcing decision. The growing trend toward offshore outsourcing of CRM serves to highlight a number of issues that merit careful managerial consideration. In this context, we highlight supply-side versus demand-side effects of CRM offshore outsourcing, the economics of CRM offshore outsourcing versus CRM automation, CRM offshore outsourcing versus CRM offshoring, and the evolution of hierarchical CRM organizations toward market based CRM business systems, and other issues.

An Empirical Investigation of Accounting Outsourcing in Iranian SMEs: Transaction Cost Economics and Resource-Based Views

This study aims to identify the factors affect Iranian SME decision to outsource accounting functions in term oftransaction cost economics (TCE) and resource- based view (RBV) perspectives in manufacturing sector. Datacollected by using a 658 questionnaire survey with SME owner/ managers. Our multiple linear regressionanalysis shows that higher asset specificity was associated with lower levels of outsourcing of accountingfunctions. In addition, outsourcing intensity is positively and significantly related to trust in external accountant,degree of competition, and corporate strategy. Besides, when we included control variables such as firm size andfirm age, education and experience in our regression equation, the association between outsourcing intensity andfour independent variables was remained statistically significant.

What factors determine the outsourcing intensity? A dynamic panel data approach for manufacturing industries

The present article investigates the determinants of outsourcing production using a panel of 93 Spanish manufacturing industries for the period 1993 to 2002. Outsourcing is measured as production tasks which are contracting out to external suppliers, a more direct and suitable indicator. After controlling for unobserved heterogeneity and simultaneity, our results show a high persistence of the outsourcing intensity. Moreover, outsourcing of production is positively related to unit labour costs, skills requirements, national ownership and orientation to international markets. We also find evidence for a negative link between the outsourcing intensity and the share of small firms.

Sectoral adjustment of employment to shifts in outsourcing and trade: evidence from a dynamic fixed effects multinomial logit model

AbstractThis paper analyzes the effects of trade and outsourcing on the transition probabilities of employment between sectors, using a dynamic multinomial logit framework with fixed effects. The data cover a sample of individual Austrian male workers over the period 1988–2001. Our results strongly support the view that international economic forces are important determinants of labor market turnover. In particular, an increase in the outsourcing intensity negatively affects the probability of staying in or changing into the manufacturing sector, even more so for industries with a comparative disadvantage. Copyright © 2007 John Wiley & Sons, Ltd.

INTERNATIONAL OUTSOURCING AND THE PRODUCTIVITY OF LOW‐SKILLED LABOR IN THE EU

This article presents first insights into the role of international outsourcing on the productivity of low‐skilled workers in EU manufacturing. Whereas in the short run international outsourcing exhibits a negative marginal effect on real value added per low‐skilled worker, the long‐run parameter estimates reveal a positive impact. This may be explained by imperfections in European labor and goods markets, which prohibit an immediate adjustment in the factor employment and the output structure. The change in the outsourcing intensity since 1993 alone acounts for a long‐run increase of about 6.0% in the real value added per low‐skilled worker. (JEL C33, F14, F15)

Outsourcing, Foreign Ownership, and Productivity: Evidence from UK Establishment‐level Data

AbstractThe paper presents an empirical analysis of “outsourcing” using establishment‐level data for UK manufacturing industries. The authors analyze an establishment's decision to outsource and the subsequent effects of outsourcing on the establishment's productivity. Outsourcing is compared in domestic with foreign‐owned establishments. The empirical results suggest that high wages are positively related to outsourcing, suggesting that the cost‐saving motive is important. Foreign‐owned firms have higher levels of outsourcing than domestic establishments. In the productivity analysis, an establishment's outsourcing intensity is positively related to its labor productivity and total factor productivity growth, and this effect is more pronounced for foreign establishments.

Outsourcing, Foreign Ownership and Productivity: Evidence from UK Establishment Level Data

This paper presents an empirical analysis of using establishment level data for UK manufacturing industries. We analyse an establishment's decision to outsource and the subsequent effects of outsourcing on the establishment's productivity. We compare outsourcing in domestic with foreign-owned establishments. Our empirical results suggest that high wages are positively related to outsourcing, suggesting that the cost saving motive is important. We also find that foreign-owned firms have higher levels of outsourcing than domestic establishments. In the productivity analysis we find that an establishment's outsourcing intensity is positively related to its labour productivity and total factor productivity growth and that this effect is more pronounced for foreign establishments.