In-house Off-shoring of Product Development by MNCs

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Main Author: Dirk Michael Boehe
Format: Artículo científico
Language:en
Published: Associação Nacional de Pós-Graduação e Pesquisa em Administração 2008
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author Dirk Michael Boehe
author_facet Dirk Michael Boehe
contents In-house Off-shoring of Product Development by MNCs Dirk Michael Boehe Administración y Contabilidad Offshoring MNC subsidiaries product development This paper deals with in-house off-shoring of product development activities, here defined as the cost and efficiency motivated shifting of product development projects within the network of multinational companies (MNC) to low and medium wage countries. The aim of the paper is to develop and test a succinct model which is based on transaction cost reasoning and which explains how and why different governance forms can be combined in order to reap efficiency gains in off-shoring. The results from a structural equations model suggest support for a configuration which positively associates in-house off-shoring with local outsourcing and negatively associates in-house off-shoring with local cooperation in product development. The results are moderated by size and age of the MNC subsidiary, suggesting that larger subsidiaries are more likely to become an offshore destination and to outsource part of their product development. I argue that this combination of governance forms increases scale, flexibility and speed to market while reducing costs and knowledge leakage hazards. The results imply that the internalization theory should be extended in order to take account of off-shoring and its distinctive characteristics 2008 artículo científico 1807-7692 https://www.redalyc.org/articulo.oa?id=84150102 en http://www.redalyc.org/revista.oa?id=841 BAR - Brazilian Administration Review application/pdf Associação Nacional de Pós-Graduação e Pesquisa em Administração BAR - Brazilian Administration Review (Brasil) Num.1 Vol.5
format Artículo científico
id redalyc_84150102
institution Redalyc
language en
publishDate 2008
publisher Associação Nacional de Pós-Graduação e Pesquisa em Administração
spellingShingle In-house Off-shoring of Product Development by MNCs
Dirk Michael Boehe
Administración y Contabilidad
Offshoring
MNC subsidiaries
product development
In-house Off-shoring of Product Development by MNCs Dirk Michael Boehe Administración y Contabilidad Offshoring MNC subsidiaries product development This paper deals with in-house off-shoring of product development activities, here defined as the cost and efficiency motivated shifting of product development projects within the network of multinational companies (MNC) to low and medium wage countries. The aim of the paper is to develop and test a succinct model which is based on transaction cost reasoning and which explains how and why different governance forms can be combined in order to reap efficiency gains in off-shoring. The results from a structural equations model suggest support for a configuration which positively associates in-house off-shoring with local outsourcing and negatively associates in-house off-shoring with local cooperation in product development. The results are moderated by size and age of the MNC subsidiary, suggesting that larger subsidiaries are more likely to become an offshore destination and to outsource part of their product development. I argue that this combination of governance forms increases scale, flexibility and speed to market while reducing costs and knowledge leakage hazards. The results imply that the internalization theory should be extended in order to take account of off-shoring and its distinctive characteristics 2008 artículo científico 1807-7692 https://www.redalyc.org/articulo.oa?id=84150102 en http://www.redalyc.org/revista.oa?id=841 BAR - Brazilian Administration Review application/pdf Associação Nacional de Pós-Graduação e Pesquisa em Administração BAR - Brazilian Administration Review (Brasil) Num.1 Vol.5
title In-house Off-shoring of Product Development by MNCs
topic Administración y Contabilidad
Offshoring
MNC subsidiaries
product development
url https://www.redalyc.org/articulo.oa?id=84150102