In this project the Principal Investigators will examine the causes and consequences of outsourcing and offshoring decisions. Specifically, the research will integrate models from organizational economics with models from organization theory to examine a series of questions associated with the de-integration and globalization of the semiconductor industry. By jointly examining ownership and location decisions this research will provide precise statements regarding the primary factors driving these critical investment decisions and clarify important conceptual associations between exchange characteristics (that create different coordination and control challenges) and organizational forms (that emphasize different coordinating and control solutions). The longitudinal nature of the examination will provide a test of the stability of these associations. In addition, by providing evidence regarding the influence of the alignment between the underlying attributes of exchanges and discrete organizational solutions on innovative (e.g., measures of the frequency of product and process innovation) and financial (e.g., return on invested capital, return on sales) performance measures this study provides a foundation for more integrative research on the implications of organizational governance. Finally, by exploring the persistence of any performance advantages (or disadvantages) associated with these decisions, the findings may suggest heretofore unrecognized temporal tradeoffs associated with these decisions.
In terms of broader impacts, this research will contribute to both managerial decision-making and public policy. The results may provide new insights about the short- and long-term performance implications of offshoring and outsourcing decisions under various conditions that will aid managers and policy makers who are concerned with production sourcing decisions. Also, this project will develop protocols that other scholars can use to analyze a publicly available database of information describing financial and organizational decisions in this industry.