Location drivers as antecedents of offshoring performance the moderating effect of the governance model

The present paper deals with the performance implications of the offshoring of service activities. Offshoring is intended as delocalization of business services in foreign countries that may occur either through a wholly-owned company (captive offshoring) or by outsourcing the service activity (offshore outsourcing). We investigate the relationship between location drivers (low cost, resources availability, cultural proximity, and the presence of local networks) and both operational and strategic performance of the offshoring firm. We extend the literature by investigating the role of the governance mode on the relationship between those location drivers and performance. Our results show that low cost and resources availability have a direct effect on operational performance and local networks have a direct effect on strategic performance. Moreover, results show that offshore outsourcing emphasizes the effect of resources availability on operational performance, while captive offshoring emphasizes the effect of local networks on strategic performance.