Sangam: A Confluence of Knowledge Streams

The role of political risk in service offshoring entry mode decisions

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dc.creator Hansen, Carsten
dc.creator Mena, Carlos
dc.creator Aktas, Emel
dc.date 2018-12-07T09:40:38Z
dc.date 2018-12-07T09:40:38Z
dc.date 2018-09-08
dc.date.accessioned 2022-05-25T16:40:24Z
dc.date.available 2022-05-25T16:40:24Z
dc.identifier Hansen C, Mena C, Aktas E. (2019) The role of political risk in service offshoring entry mode decisions. International Journal of Production Research, Volume 57, Issue 13, 2019, pp. 4244-4260
dc.identifier 0020-7543
dc.identifier https://doi.org/10.1080/00207543.2018.1518601
dc.identifier http://dspace.lib.cranfield.ac.uk/handle/1826/13701
dc.identifier.uri http://localhost:8080/xmlui/handle/CUHPOERS/182553
dc.description This research investigates the effect of political risk on the offshore service industry. The study empirically examines how an extended political risk definition, operationalised into a model consisting of 12 political risk variables, helps predict location decisions across offshoring entry modes and activity types. The research focuses on captive offshoring and offshore outsourcing entry modes, and Information Technology Outsourcing (ITO), Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO) activity types. The research indicated that political risk factors accounted for 38% of the variability in offshore outsourcing flows, implying that concerns about service disruptions and/or cost implications of external uncertainties feature as a key factor in supplier selection and location decisions. The findings further confirm a positive relationship between institutional and regulatory factors in host locations, and the flow of offshoring activities with a high knowledge content. The research contributes to enhancing the explanatory ability of Transaction Cost Economics by re-operationalising the concept of political risk in the context of both offshore outsourcing and captive offshoring. For practitioners, these findings provide a clear indication of the political risks that can affect service offshoring decisions; for policymakers, they highlight the importance of strengthening institutional and regulatory factors to attract investment.
dc.language en
dc.publisher Taylor and Francis
dc.rights Attribution-NonCommercial 4.0 International
dc.rights http://creativecommons.org/licenses/by-nc/4.0/
dc.subject transaction cost economics
dc.subject regression analysis
dc.subject offshoring
dc.subject outsourcing
dc.subject risk management
dc.subject political risk
dc.title The role of political risk in service offshoring entry mode decisions
dc.type Article


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