International Outsourcing: Innovation Speed, Product Quality, and Market Performance

Abstract

Today, firms are pursuing international outsourcing to gain competitive advantages under extensive global competitions. Firms believe that future global success will depend on several factors through cost reduction, quality improvements, the development of innovative product technology, and the ability to reduce the time to market to develop new products. Although there have been extensive researches to examine global sourcing issues, their work seems to have a tendency to focus on internal sourcing issues having a rationale in internalization and TCE theory. This paper argues the optimal degree of international outsourcing to bring better performance, innovation speed and product quality which are indispensable for firms to gain competitive advantages in global environments. This paper also proposes the conceptual framework to investigate to examine the relationship between international outsourcing and innovation speed and product quality for firm’s performance.