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Offshoring and international competitiveness: antecedents of offshoring advanced tasks

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Abstract

During the past decade, offshoring has become an established business practice. Yet it is still more common to offshore less advanced tasks compared with offshoring more advanced tasks, i.e., tasks closer to the core activities of the firm. The latter is a new phenomenon which raises many new issues on the boundaries of the firm. More or less advanced tasks can be found within all activities, e.g., in sales and marketing where telesales is on the less advanced end of the scale while branding and identity building are on the advanced end of the scale. This article focuses on the antecedents of advanced offshoring, exploring what causes firms to offshore some of their more advanced tasks. Our findings indicate that while the lower cost of unskilled, labor-intensive processes is the main driver for firms that offshore less advanced tasks, the offshoring of advanced tasks is part of firms’ strategy to achieve international competitiveness through access to cross-border knowledge flows and foreign knowledge resources. Furthermore, offshoring of advanced manufacturing tasks seems to be more widespread and experience-based than the offshoring of advanced service tasks.

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Notes

  1. As a robustness check we also ran the model as an ordered logistic regression model. It provided qualitatively very similar, but slightly weaker, results. The logistic regression model is available upon request from the authors.

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Authors and Affiliations

  1. Department of Strategic Management and Globalization, Copenhagen Business School, Kilevej 14 A, 2nd, 2000, Frederiksberg, Denmark

    Peter D. Ørberg Jensen & Torben Pedersen

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  1. Peter D. Ørberg Jensen
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  2. Torben Pedersen
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Correspondence to Torben Pedersen.

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Jensen, P.D.Ø., Pedersen, T. Offshoring and international competitiveness: antecedents of offshoring advanced tasks. J. of the Acad. Mark. Sci. 40, 313–328 (2012). https://doi.org/10.1007/s11747-011-0286-x

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