National corporate systems and outsourcing decisions: A cross-country analysis

Traditionally, researchers have studied outsourcing from a transaction-cost perspective, coping with the outsourcing decision as a make-or-buy dilemma. Further explanations refer to forms of institutionalism (North, 1990; Roy, 1997), whereas outsourcing may stem from isomorphism; additionally institutional theory may also help investigate outsourcing. All these perspectives fall short in explaining cross-national diversity since they are all grounded on dyadic relations. Similarly to the Aguilera and Jackson (2003) model of cross-national diversity on corporate governance, we argue that the outsourcing decision may be grounded on institutional factors, such as the cross-national governance systems. In this paper we develop a research model to explain the diversity of outsourcing practice at a cross-countries level, considering stakeholders (property and labor) as significant drivers for the outsourcing decisions.