Offshoring : economic analysis and return on the basis

Abstract EN

Offshoring is often seen as a reverberation of the search for cost reduction.

This reduction is born with the provider's ability to lower his production costs.

In this paper, our aim goes beyond this rather limited conceptualization of Offshoring by introducing for the first time in the literature a new illustration more complementary to this strategy.

A second assumption based on the notion of transaction costs is superimposed.

Certainly, the parallel combination of these two strands of research helps to provide a more rational economic justification for this decision.

Using a conceptual approach, the results of this research suggest a broad failure of the apprehension of Offshoring just by production costs.

The interference between production costs and transaction costs, therefore, leads to a strict positioning of the Offshoring decision.

A client firm uses Offshoring not only to take advantage of low production costs offered by the provider, but also because the transaction costs are reasonable.