Skip to main content
Journal cover image

Proximity and information technology outsourcing: How local are IT services markets?

Publication ,  Journal Article
Arora, A; Forman, C
Published in: Journal of Management Information Systems
September 1, 2007

We examine the question of which services are tradable within a concrete setting: the outsourcing of information technology (IT) services across a broad cross-section of establishments in the United States. If markets for IT services are local, then we should expect increases in local supply would increase the likelihood of outsourcing by lowering the cost of outsourcing. If markets are not local, then local supply will not affect outsourcing demand. We analyze the outsourcing decisions of a large sample of 99,775 establishments in 2002 and 2004, for two types of IT services-programming and design and hosting. Programming and design projects require communication of detailed user requirements whereas hosting requires less coordination between client and service provider than programming and design. Our empirical results bear out this intuition: the probability of outsourcing programming and design is increasing in the local supply of outsourcing, and this sensitivity to local supply conditions has been increasing over time. This suggests there is some nontradable or "local" component to programming and design services that cannot be easily removed. In contrast, the decision to outsource hosting is sensitive to local supply only for firms for which network uptime and security concerns are particularly acute. © 2007 M.E. Sharpe, Inc.

Duke Scholars

Altmetric Attention Stats
Dimensions Citation Stats

Published In

Journal of Management Information Systems

DOI

ISSN

0742-1222

Publication Date

September 1, 2007

Volume

24

Issue

2

Start / End Page

73 / 102

Related Subject Headings

  • Information Systems
  • 4609 Information systems
  • 3503 Business systems in context
  • 1503 Business and Management
  • 0806 Information Systems
 

Citation

APA
Chicago
ICMJE
MLA
NLM
Arora, A., & Forman, C. (2007). Proximity and information technology outsourcing: How local are IT services markets? Journal of Management Information Systems, 24(2), 73–102. https://doi.org/10.2753/MIS0742-1222240204
Arora, A., and C. Forman. “Proximity and information technology outsourcing: How local are IT services markets?Journal of Management Information Systems 24, no. 2 (September 1, 2007): 73–102. https://doi.org/10.2753/MIS0742-1222240204.
Arora A, Forman C. Proximity and information technology outsourcing: How local are IT services markets? Journal of Management Information Systems. 2007 Sep 1;24(2):73–102.
Arora, A., and C. Forman. “Proximity and information technology outsourcing: How local are IT services markets?Journal of Management Information Systems, vol. 24, no. 2, Sept. 2007, pp. 73–102. Scopus, doi:10.2753/MIS0742-1222240204.
Arora A, Forman C. Proximity and information technology outsourcing: How local are IT services markets? Journal of Management Information Systems. 2007 Sep 1;24(2):73–102.
Journal cover image

Published In

Journal of Management Information Systems

DOI

ISSN

0742-1222

Publication Date

September 1, 2007

Volume

24

Issue

2

Start / End Page

73 / 102

Related Subject Headings

  • Information Systems
  • 4609 Information systems
  • 3503 Business systems in context
  • 1503 Business and Management
  • 0806 Information Systems