Development Of Service Outsourcing And Its Impact On Industrial Structure Upgrading In Liaoning Province

Liaoning Province has made great progress since the beginning of the reform and opening-up policy 30 years ago. However, many problems have arisen during this time such as the industrial structure. As the eldest son of the People's Republic of China, Liaoning Province has been under the influence of national policies and strategies as it has developed. Emphasis on development of the second industry has resulted in an imbalance between the three industries. This imbalance has brought a variety of problems to Liaoning Province and much effort has been expended to correct this situation. Development of cities such as Dalian and Shenyang has brought an increase in international trade, and reconstruction of industrial structure. Service outsourcing has played a particularly important role in these processes, and has many advantages such as growth in high technology, lower costs, and increased employment. It not only contributes to the development of tertiary industry, but also transforms traditional manufacturing industry. Therefore, development of service outsourcing will upgrade the industrial structure of Liaoning Province. Developing countries usually undertake service outsourcing in the process of global service outsourcing development. Undertaking service outsourcing is also the core business of service outsourcing in Liaoning Province. So this paper analyzes the impact that service outsourcing has on industrial structure upgrading from the perspective of acceptor.The paper first analyzes the theoretical basis of service outsourcing including comparative advantages, economy of scale, and Michael Porter's value chain theory. Second, it explains the theoretical mechanism through which service outsourcing positively affects industrial structure. Third, it discusses the status of service outsourcing and the present industrial structure in Liaoning Province. Then a multiple linear regression model shows how the development of service outsourcing in Liaoning Province will improve the industrial structure. SWOT analysis lends additional support. In conclusion, the paper proposes several solutions to promote the development of service outsourcing and industrial structure upgrading.