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Impact of Vendor Selection on Firms' IT Outsourcing: The Korea Experience

Title
Impact of Vendor Selection on Firms' IT Outsourcing: The Korea Experience
Author
이상용
Keywords
Client Firms; Event Study; IT Outsourcing; IT Vendors; Transaction Cost Theory
Issue Date
2012-04
Publisher
IGI PUBL
Citation
JOURNAL OF GLOBAL INFORMATION MANAGEMENT, 2012, 20(2), P.25-43
Abstract
Information technology (IT) outsourcing is often used as a cost-saving strategy for firms. In IT outsourcing, the choice of vendor is a key factor determining success. This study examines the impact that the choice of IT vendor has on firms' IT outsourcing in Korea. The authors empirically analyzed the impact of certain characteristics of IT vendors on the market value of client firms in Korea using the event study methodology. First, the authors found that IT outsourcing announcements significantly increased the market value of firms. The authors also found that the market response to high asset-specific services of the IT vendor was significantly greater than the response to low asset-specific services. The authors' results also showed that the effect of Korean vendors was greater than that of foreign vendors. However, the difference between IT outsourcing to large vendors and small vendors in Korea was not significant, in contrast to the US. The information provided in this study can be used by client firms to select better IT vendors and by IT vendors to develop strategies to survive the rapidly changing IT outsourcing market in Korea.
URI
https://www.igi-global.com/gateway/article/65097https://repository.hanyang.ac.kr/handle/20.500.11754/70974
ISSN
1062-7375
DOI
10.4018/jgim.2012040102
Appears in Collections:
GRADUATE SCHOOL OF BUSINESS[S](경영전문대학원) > BUSINESS ADMINISTRATION(경영학과) > Articles
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