Research On Factors For Place Selection Of Offshore Service Outsourcing

With the development of information technology, cross-border trade of services has become more and more frequently. Combined with the deepening of globalization, competition among enterprises become more intense. Offshore Service Outsourcing as one method for enterprises reducing costs and improving competitiveness are becoming increasingly popular. Similar to the industrial outsourcing, Service Outsourcing can also bring many countries beneficial economic effects. So developing countries take appropriate measures to attract Offshore Outsourcing. Searching literature related to Offshore Outsourcing, most studies focused on three aspects:motivation of the service outsourcing, service outsourcing and employment,service outsourcing and the economic.But the literature contraposing the facts of service outsourcing is less. Researching the factor of Service Outsourcing, especially offshore service outsourcing is very beneficial for the economy of China.This article is divided into five parts. The first part is introduction which elaborated the background, significance, academic ideas and research. The second part is an overview of service offshore outsourcing and introductions from two ways: global service outsourcing market conditions and China's service outsourcing market conditions. The third part is the selection and explanation of the factors which is divided into two aspects, namely, macroeconomic factors and microeconomic factors. Among them, the macroeconomic factors include market size, development level of information technology, legal environment, market openness, service development, language and cultural compatibility, the state incentives; microeconomic factors include labor costs, labor quality and enterprise scale and quality. The fourth part is the focus of this paper, in this section, combined with data availability and accuracy, the paper selected seven key indicators of 25 provinces in China using panel data model for analysis. Eventually the conclusion is GDP, wage levels, the first lag of the number of graduates of higher education, the tertiary industry and the rate of case solved are proportional to the offshore outsourcing. Import and export share in GDP is independent with the offshore outsourcing. The fifth part is about policies. On the basis of the results in the model in fourth section, the policies can be put forward in three areas:first, focus on training service outsourcing talents to improve the human capital stock; the second is to increase the wages lever of service outsourcing industry, to attract high-end professionals; the third is to improve the legal system, especially protection of intellectual property law.By analyzing the factors on service outsourcing and China's current situation, the paper come to the conclusion:china has a huge market for service outsourcing and has many advantages in offshore outsourcing services. If coupled with appropriate government policies, there will be rapid growth for China's service outsourcing industry.