Title: Outsourcing in the service based industries: an analysis using transaction cost economics and knowledge-based view

Authors: Shanthi Gopalakrishnan; Patrick A. Saparito

Addresses: New Jersey Institute of Technology, University Heights, Newark, NJ 07102-1982, USA. ' Saint Joseph's University, Philadelphia, PA 19131, USA

Abstract: While intense global competition drives firms to move knowledge-based activities offshore to take advantage of inexpensive foreign labour, there are increased costs with monitoring and managing activities located in distant locations. Additionally, certain knowledge types may be more difficult to transfer and assimilate across national borders. Both transaction cost economics and the knowledge-based view focus on important but separate issues related to offshore outsourcing. In this paper we combine both theoretical views and offer five propositions which we test using the data from two exploratory case studies. Finally, we discuss our results and give implications for future research.

Keywords: strategy; offshore outsourcing; global sourcing; service industry; transaction cost economics; TCE; knowledge-based view; KBV; offshoring; services; knowledge management.

DOI: 10.1504/IJKMS.2011.048433

International Journal of Knowledge Management Studies, 2011 Vol.4 No.4, pp.359 - 374

Received: 29 Apr 2011
Accepted: 01 Nov 2011
Published online: 29 Apr 2015 *

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