An Analysis Of Service Outsourcing In The Framework Of New Classical Trade Theory

At the background of the global financial crisis, the service outsourcing could change the growth mode of foreign trade and speed up industrial restructuring to enable enterprises to reduce global operating costs, increase product revenue, solution the imbalance of economic structure and eco-environmental degradation. Service outsourcing has opened up a new direction for the international division of labor, and has become the strategic choice of improving the core competitiveness of transnational corporations. Therefore, its origin, characteristics and development trends are worth to be researched. At the same time it has a positive significance to respond to the global financial crisis will have.New classical trade theory is a new development in trade theory; it comes from the labor division and the transaction cost of classical economics, and focus on the dilemma between specialization and transaction cost. The questions that how does new classical trade theory explain outsourcing and sum up a general rule of this new economic phenomenon are the main purpose of this article. Therefore, this article uses the new classical trade theory as a system theory framework to research service outsourcing. Meanwhile, it puts the types of products, the number of manufacturers and transaction costs into the analysis framework, and analyzes the endogenous comparative advantage of service outsourcing in a deeper way, so that we can understand the draw cause and development of services outsourcing in a theory framework.In addition, the development status and characteristics of global service outsourcing are summed up in this article, and the development status, the impact factors and the recommendations of Chinese service outsourcing are concluded in it.In this paper, there are four parts to explain the topic.The first part provides a brief introduction of the new classical trade theory. First of all, it starts with the emergence and development of new classical trade theory, and then introduces the main elements of this theory which makes the focus of this section shifts to the organization problems. New Classical trade model brings into the individual decision-making of new classical economics of trade theory, comb the dilemma between international trade specialization and transaction costs, and explain the emergence of the enterprise, the emergence of money, the evolution of labor division and the evolution of organizational structure and so on. Then it explains the framework and model of this theory, which are the basic analytical method of new classical economics.The second part gives a general analysis of service outsourcing. First of all, it defines the service outsourcing and believes that service outsourcing is a phenomenon that companies transfer the in-house services to the outsource companies through formal or informal "level of service contract". Then it gives an overview of the development of service outsourcing, and sums up the characteristics of the corresponding. At last, it discusses the double impact of service outsourcing to the world economy and analysis the trends of service outsourcing in the global financial crisis.The third part provides a economic analysis of services outsourcing in the framework of the classical trade theory. Firstly, from the causes of outsourcing we know that division decide the level of service outsourcing, the expansion of the division could provide more services, as long as the benefits of specialization is higher than the total transaction costs, based on the core business development and reduction of costs, enterprises will accept to have services outsourcing from other companies. Secondly, this article analyzes evolution and trend of services outsourcing. Finally, through the geometric analysis of outsourcing services, it gives a mathematical proof on the conditions of service outsourcing and comes up to some conclusions.The forth part analyzes the development characteristics of service outsourcing in China. Firstly, it describes the status of Chinese service outsourcing. The rapid rise of China's software and information service industry provide a solid foundation for Chinese service outsourcing. Business process outsourcing services in China is a bright spot for outsourcing. Secondly, it sums up the impact factors of China's development of service outsourcing, which conclude human resources, policy-oriented and foreign direct investment. Finally, it gives some suggestions to China's services outsourcing.