Offshoring of Information-intensive Services: Structural Breaks in Industry Life Cycles. ACES Working Papers, August 2010

Bunyaratavej, Kraiwinee and Hahn, Eugene D. (2010) Offshoring of Information-intensive Services: Structural Breaks in Industry Life Cycles. ACES Working Papers, August 2010. [Working Paper]

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Abstract

The emergence of widespread offshoring of information-intensive services is arguably one of the more impactful phenomena to transform business in the last ten years. A growing body of research has examined the firm-level drivers andlocation factors (i.e., the why's and where's) of services offshoring. However, little empirical research has examined the maturation sequencing (or when's) of services offshoring. Adopting industry life cycle theory as a framework, the key research questions examined in the paper are: when do different categories of offshoring services provision change from being emergent sectors to more mature ones, and how does the timing of this sequence relate to the type of service offshored. Using a database of 1420 offshore services FDI projects, we find that the value-add as well as the information sensitivity of the service category are related to when the service categories progress through the industry life cycle. Implications for future waves of service offshoring are discussed.

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