TITLE:
Economics of Offshore IT Outsourcing: An International Trade Perspective
AUTHORS:
Bijoy Bordoloi, Anne Powell
KEYWORDS:
Technology Economics; Economics of Offshore Outsourcing; International Trade Theory; Information Economics; Position Paper
JOURNAL NAME:
Technology and Investment,
Vol.4 No.4,
November
8,
2013
ABSTRACT: In recent times, offshore outsourcing of Information Technology (IT)
products and services, including software development and
maintenance activities, has been an issue of much controversy in the United
States, with popular sentiment being against outsourcing in the mass media. Is
offshore outsourcing really bad for the US economy? If yes, why did so many US
companies, including IT companies, start outsourcing to begin with and still
continue to do so? For that matter, why doesn’t the federal government simply
ban it as a national policy? To provide some possible answers to these
questions, this paper examines the issue of offshore outsourcing from the
perspectives of international trade theory and the unique cost characteristics
of “information goods”.