Analysis On The Relationship Between Service Outsourcing And Technological Progress

With the boost of the new global shift of service industries, International Service Outsourcing(ISO)has been the strategic option of Transnational Corporations(TNCs)to increase Core Competence, which offers a large potential development opportunity for those developing host countries. But up to now there have been few systemic researches in the field of ISO home and abroad. Therefore, it is both of academic value and practical sense to study on the intrinsic relationship between ISO and technology change.This dissertation aimed to study on the intrinsic relationship between ISO and technology change from two sides: the technological change motivation to ISO and the technological change effect of ISO. In the part of the study on the technological change motivation to ISO, it adopts the analysis frame of Ann Bartel,Saul Lach and Nachum Sicherman, which based on the general equilibrium model, introduces technical change in the production of the service and users' technology successively to do comparatively static analysis. In the part of the study on the technological change effect of ISO, it takes the innovations perspective to explain the technological change effect of ISO on parent countries, and it focuses on the direct technology transfer and the indirect technological diffusion to explain the technological change effect of ISO on host countries. Based on the theoretical study above, it takes the India's software industry as a typical case to do an empirical analysis in order to reveal the technological effect on the host countries of ISO. In the last part of this dissertation, with the fact of China's ISO market, gives the suggestions for China to contract with TNCs in ISO.This dissertation shows that, on one hand, an increase in the pace of the technological change will increase ISO through adding the per-period fixed costs, and technological change in the using firms, however, can also have an effect on outsourcing if it can reduce the adjustment costs of ISO thought echnological compatibility. On the other hand, ISO leads to technology change both in parent countries and host countries, furthermore, the empirical analysis of the technological effect on the host countries of ISO reveals that, both the improvement of relative productivity and technological diffusion can speed the technology change in host countries, but the direct effect is greater than the indirect effect, namely host countries' technology change depends on the parent countries' improvement of relative productivity mostly, but not the technological diffusion.