Research On The Impacts Of Institutions On International Service Outsourcing

Since the development of economic globalization, the market scale of global serviceoutsourcing has shown a strong growth trend. According to the statistic of service outsourcingreport, the market scale of global service outsourcing is between300billion U.S. dollars to500billion U.S. dollars in the year of2008, and the scale is expected to excess1000billion U.S.dollars by the time of2015. Faced with such a potential market, more and more countries want tojoin in the service outsourcing market, including both developed counties, such as Canada,Australia, and developing countries, such as China, Brazil and India. It has become the priorissue for vendor countries to stand out in massive competitors. Besides the traditional advantages,such as cheap labor, land and natural resource, the author thinks that institution factor has alreadyshown its magnificent impact on the development of international service outsourcing.To study this issue better, this paper analyzes the impact of institution on the development ofinternational service outsourcing both in theoretical and empirical way based on the panel data of26vendor countries. The empirical analysis shows that the micro and legal institution both havea significant influence on the development of international service outsourcing. This paper hasalso come up with recommendations to enhance the development level of it based on the analysisof theoretical and empirical study.