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|Title: ||Heterogeneity and Information Spillovers in Web Service Sourcing|
|Authors: ||Deltas, George - University of Illinois|
Hong, Seung-Hyun - University of Illinois
|Keywords: ||Heterogeneity; Information spillovers; Outsourcing; Switching regression|
|Issue Date: ||2009|
|Series/Report no.: ||Net Institute Working Paper;09-20|
|Abstract: ||This paper studies the role of firm heterogeneity and information
spillovers in the sourcing decision to provide web services. To this
end, we develop a theoretical model that relates these factors to firms'
decisions to outsource or use in-house resources (insource). Based on
this theoretical framework, we further construct an econometric model.
Using our estimated model, we investigate why insourcing of web services
is much more prevalent than outsourcing. We find that insourcing is
likely to generate the higher value for most firms, and lack of
information on the ecacy of outsourcing is unlikely to account for the
dominance of insourcing over outsourcing. Therefore, differences in firm
choices with regard to web services provision is primarily driven by
firm heterogeneity, rather than by information spillovers.|
|Appears in Collections:||NET Institute Working Papers Series|
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