Strategic positioning of Taiwan in the outsourcing market: Evidence from information technology services and electronic manufacturing outsourcing to China

In outsourcing relationships with China, the Electronic Manufacturing (EM) and Information Technology Services (ITS) industry in Taiwan may possess such advantages as the continuing growth of its production value, complete manufacturing supply chain, low production cost and a large-scale Chinese market, and language and culture similarity compared to outsourcing to other countries. Nevertheless, the Council for Economic Planning and Development of Executive Yuan (CEPD) found that Taiwan's IT services outsourcing to China is subject to certain constraints and might not be as successful as the EM outsourcing (Aggarwal, 2003; CEPD, 2004a; CIER, 2003; Einhorn and Kriplani, 2003; Kumar and Zhu, 2006; Li and Gao, 2003; MIC, 2006). Some studies examined this issue, but failed to (1) provide statistical evidence about lower prevalence rates of IT services outsourcing, and (2) clearly explain the lower prevalence rates of IT services outsourcing by identifying similarities and differences between both types of outsourcing contexts. This research seeks to fill that gap and possibly provide potential strategic guidelines to ITS firms in Taiwan. This study adopts Transaction Cost Economics (TCE) as the theoretical basis. The basic premise is that different types of outsourcing activities may incur differing transaction costs and realize varying degrees of outsourcing success due to differential attributes of the transactions in the outsourcing process. Using primary data gathered from questionnaire surveys of ninety two firms, the results from exploratory analysis and binary logistic regression indicated that (1) when outsourcing to China, Taiwanese firms' ITS outsourcing tends to have higher level of asset specificity, uncertainty and technical skills relative to EM outsourcing, and these features indirectly reduce firms' outsourcing prevalence rates via their direct positive impacts on transaction costs; (2) Taiwanese firms' ITS outsourcing tends to have lower level of transaction structurability relative to EM outsourcing, and this feature indirectly increases firms' outsourcing prevalence rates via its direct negative impacts on transaction costs; (3) frequency does influence firms' transaction costs in ITS outsourcing positively, but does not bring impacts into their outsourcing prevalence rates, (4) relatedness does influence firms' transaction costs positively and prevalence rates negatively in ITS outsourcing, but its impacts on the prevalence rates are not caused by the mediation effects of transaction costs, and (5) firm size of outsourcing provider does not affect firms' transaction costs, but does affect their outsourcing prevalence rates in ITS outsourcing directly and positively. Using primary data gathered from face-to-face interviews of executives from seven firms, the results from inductive analysis indicated that (1) IT services outsourcing has lower prevalence rates than EM outsourcing, and (2) this result is mainly attributed to Taiwan's core competence in manufacturing and management and higher overall transaction costs of IT services outsourcing. Specifically, there is not much difference between both types of outsourcing context in the transaction characteristics of reputation and most aspects of overall comparison. Although there are some differences in the feature of firm size of the outsourcing provider, the difference doesn't cause apparent impacts on firms' overall transaction costs. The medium or above medium difference in the transaction characteristics of asset specificity, uncertainty, frequency, technical skills, transaction structurability, and relatedness has caused higher overall transaction costs for IT services outsourcing. This higher cost might cause lower prevalence rates for ITS outsourcing relative to EM outsourcing. Overall, the interview results are consistent with the statistical analyses and provide support to my expectation that in outsourcing to China, Taiwan's electronic manufacturing firms do have lower prevalence rates of IT services outsourcing relative to EM outsourcing due to higher transaction costs caused by certain attributes. To solve this problem, firms' management should aim at identifying alternative strategies and strive to reduce their overall transaction costs of IT services outsourcing by initiating appropriate strategies which fit their environment and needs.

The role of the Internet on export market growth : an empirical study in Latin America

The Internet has been shown to positively influence the export activities of firms from developed countries. However, the literature is vague as to whether the Internet has an impact on the export market growth of firms form developing countries. This paper examines of a cross-national sample of 204 firms from a Latin American country (Chile). The results show that Internet marketing activities positively influence information availability and business relationships, which lead to an increase in export market growth. The findings indicate that the Internet influences not only information availability for export performance but also business relationships generally thought to be face to face interactions in nature.

Internet marketing and export market growth in Chile

Previous studies show that the Internet positively influences firms’ export activities from developed markets. However, the literature is vague as to whether the Internet has an impact on the export performance of firms from emerging markets. This study tests a conceptual model that includes the effect of Internet marketing capabilities on export market growth in an emerging market. Drawing on a cross-national sample of 204 export firms from a Latin American country (Chile), findings indicate that Internet marketing capabilities positively influence the availability of export information, which in turn impacts the development of business network relationships and export market growth.

Role of Management Decision Variables in Determining Technology Progress and Technical Efficiency in Indian Electronic Industry

This paper analyses the influence of management on Technical Efficiency Change (TEC) and Technological Progress (TP) in the communication equipment and consumer electronics sub-sectors of Indian hardware electronics industry. Each sub-sector comprises 13 sample firms for two time periods.The primary objective is to determine the relative contribution of TP and TEC to TFP Growth (TFPG) and to establish the influence of firm specific operational management decision variables on these two components. The study finds that both the sub-sectors have strived and achieved steady TP but not TEC in the period of economic liberalisation to cope with the intensifying competition. The management decisions with respect to asset and profit utilization, vertical integration, among others, improved TP and TE in the sub-sectors. However, R&D investments and technology imports proved costly for TFP indicating inadequate efforts and/or poor resource utilisation by the management. Management was found to be complacent in terms of improving or developing their own technology as indicated by their higher dependence on import of raw materials and no influence of R&D on TP.

Organic certification, export market access and the impacts of policy: Bayesian estimation of avocado smallholder “times-to-organic certification” in Michoacán Mexico

This study analyzes organic adoption decisions using a rich set of time-to-organic durations collected from avocado small-holders in Michoacán Mexico. We derive robust, intrasample predictions about the profiles of entry and exit within the conventional-versus-organic complex and we explore the sensitivity of these predictions to choice of functional form. The dynamic nature of the sample allows us to make retrospective predictions and we establish, precisely, the profile of organic entry had the respondents been availed optimal amounts of adoption-restraining resources. A fundamental problem in the dynamic adoption literature, hitherto unrecognized, is discussed and consequent extensions are suggested.

The RELQUAL scale: a measure of relationship quality in export market ventures

In this article, the authors develop a new measurement scale (the RELQUAL scale) to assess the degree of relationship quality between the exporting firm and the importer. Relationship quality is presented as a high-order concept. Findings reveal that a better quality of the relationship results in a greater (1) amount of information sharing, (2) communication quality, (3) long-term orientation, as well as (4) satisfaction with the relationship. The four multi-item scales show strong evidence of reliability as well as convergent, discriminant and nomological validity in a sample of British exporters. Findings also reveal that relationship quality is positively and significantly associated with export performance. Suggestions for applying the measure in future research are presented.

Mexican cement industry (technology, market structure and growth)

Includes bibliography

Argentine cement industry (technology, market structure and growth)

Includes bibliography