Abstract
Drawing on the home country literature, we argue that firms headquartered or located in countries with strong labor protection may face challenges in their domestic operations. These firms are likely to initiate offshoring to enhance operational efficiency. Building on this argument, we also examine the boundary conditions moderating this proposed effect including labor productivity and employee stock ownership. Results based on a sample of information technology firms operating within five developed countries during 1990–2010 provide support for these arguments. These findings suggest that offshoring can be a partial exit strategy for firms to address the institutional challenges in their home country.
| Original language | English |
|---|---|
| Pages (from-to) | 632-640 |
| Number of pages | 9 |
| Journal | Journal of World Business |
| Volume | 53 |
| Issue number | 5 |
| Early online date | 9 Apr 2018 |
| DOIs | |
| Publication status | Published - Nov 2018 |
Funding
We acknowledge the contributions made by Special Issue Editors Alvaro Cuervo-Cazurra, Yadong Luo, and Ravi Ramamurti; Associate Editor Siah Hwee Ang; two reviewers; and participants at the JWB Special Issue Workshop (Boston, June 2017). We also appreciate the helpful comments from Gautam Ahuja, Dane Blevins, Elizabeth Lim, Zhiang Lin, Brian Pinkham, Roberto Ragozzino, Don Siegel, and Bill Wan. Earlier versions were presented at the City University of Hong Kong, Georgia State University, University of Texas at Dallas, as well as the Academy of Management, and the Academy of International Business. This study was supported, in part, by the CityUHK Start-Up Research Grant (No. 7200268 ) and the Jindal Chair at UT Dallas .
| Funders | Funder number |
|---|---|
| Academy of International Business | 7200268 |
| City University of Hong Kong | |
| Georgia State University |
Keywords
- Employee stock ownership
- Home country
- Labor productivity
- Labor protection
- Offshoring
