Theoretical Economics Letters

Volume 8, Issue 3 (February 2018)

ISSN Print: 2162-2078   ISSN Online: 2162-2086

Google-based Impact Factor: 1.19  Citations  h5-index & Ranking

Corporate Quasi-Strategic Alliance via Outsourcing Transactions

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DOI: 10.4236/tel.2018.83029    685 Downloads   1,293 Views  
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ABSTRACT

This paper relates outsourcing parties together and tests whether the outsourcing contracts have any impact on the relationship of the two parties’ performance. Both the ex-anti and the ex-post changes in stock and accounting related performance of the contract signatories are examined. We find that after the contract effective year, there is statistically significant cross-autocorrelation between client and vendor firms’ stock returns. What’s more, on average daily returns of the client stocks lead those of the vendor stocks. We also find that accounting performance changes between the two parties show significantly higher level of cross-correlation than pre-event. Our finding of an increase in cross-autocorrelation between the ex-post performance of client and vendor firms indicates that corporate outsourcing transactions result in a quasi-strategic alliance.

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Gao, N. (2018) Corporate Quasi-Strategic Alliance via Outsourcing Transactions. Theoretical Economics Letters, 8, 405-420. doi: 10.4236/tel.2018.83029.

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