Build-operate-transfer Outsourcing Contracts in Services

Boon or Bane to Emerging Market Vendor Firms?

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    Build-operate-transfer (BOT) contracting has been widely used in the engineering and construction industry and has recently spread into the service industry domains. Notably, service provider firms from emerging markets, India in particular, are now offering BOT outsourcing contracts in which the client firms are allotted call options, i.e. the right, but not the obligation, to transfer pre-specified assets from the service provider. As such, BOT outsourcing contracts seems to be an interesting contractual novelty that combines the advantages of outsourced and captive offshoring operations. In this paper we investigate under which circumstances a BOT outsourcing contract (i.e. a contract where the client firm exercises its call option) is beneficial, or the opposite, to the emerging market vendor firm. Whether BOT outsourcing contracts are boon or bane to an emerging market vendor basically hinges, we submit, on its internal diffusion of client-specific knowledge and capabilities prior to the execution of the call option
    Original languageEnglish
    JournalJournal of International Management
    Volume19
    Issue number3
    Pages (from-to)220-231
    ISSN1075-4253
    DOIs
    Publication statusPublished - Sep 2013

    Cite this

    @article{c85fd79168224cd48bc05433fcccfca3,
    title = "Build-operate-transfer Outsourcing Contracts in Services: Boon or Bane to Emerging Market Vendor Firms?",
    abstract = "Build-operate-transfer (BOT) contracting has been widely used in the engineering and construction industry and has recently spread into the service industry domains. Notably, service provider firms from emerging markets, India in particular, are now offering BOT outsourcing contracts in which the client firms are allotted call options, i.e. the right, but not the obligation, to transfer pre-specified assets from the service provider. As such, BOT outsourcing contracts seems to be an interesting contractual novelty that combines the advantages of outsourced and captive offshoring operations. In this paper we investigate under which circumstances a BOT outsourcing contract (i.e. a contract where the client firm exercises its call option) is beneficial, or the opposite, to the emerging market vendor firm. Whether BOT outsourcing contracts are boon or bane to an emerging market vendor basically hinges, we submit, on its internal diffusion of client-specific knowledge and capabilities prior to the execution of the call option",
    keywords = "Build-operate-transfer, Inter-firm linkages, Offshore outsourcing, Real options, Services",
    author = "{{\O}rberg Jensen}, {Peter D.} and Bent Petersen",
    year = "2013",
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    doi = "10.1016/j.intman.2013.03.001",
    language = "English",
    volume = "19",
    pages = "220--231",
    journal = "Journal of International Management",
    issn = "1075-4253",
    publisher = "Elsevier Inc.",
    number = "3",

    }

    Build-operate-transfer Outsourcing Contracts in Services : Boon or Bane to Emerging Market Vendor Firms? . / Ørberg Jensen, Peter D. ; Petersen, Bent.

    In: Journal of International Management, Vol. 19, No. 3, 09.2013, p. 220-231.

    Research output: Contribution to journalJournal articleResearchpeer-review

    TY - JOUR

    T1 - Build-operate-transfer Outsourcing Contracts in Services

    T2 - Boon or Bane to Emerging Market Vendor Firms?

    AU - Ørberg Jensen, Peter D.

    AU - Petersen, Bent

    PY - 2013/9

    Y1 - 2013/9

    N2 - Build-operate-transfer (BOT) contracting has been widely used in the engineering and construction industry and has recently spread into the service industry domains. Notably, service provider firms from emerging markets, India in particular, are now offering BOT outsourcing contracts in which the client firms are allotted call options, i.e. the right, but not the obligation, to transfer pre-specified assets from the service provider. As such, BOT outsourcing contracts seems to be an interesting contractual novelty that combines the advantages of outsourced and captive offshoring operations. In this paper we investigate under which circumstances a BOT outsourcing contract (i.e. a contract where the client firm exercises its call option) is beneficial, or the opposite, to the emerging market vendor firm. Whether BOT outsourcing contracts are boon or bane to an emerging market vendor basically hinges, we submit, on its internal diffusion of client-specific knowledge and capabilities prior to the execution of the call option

    AB - Build-operate-transfer (BOT) contracting has been widely used in the engineering and construction industry and has recently spread into the service industry domains. Notably, service provider firms from emerging markets, India in particular, are now offering BOT outsourcing contracts in which the client firms are allotted call options, i.e. the right, but not the obligation, to transfer pre-specified assets from the service provider. As such, BOT outsourcing contracts seems to be an interesting contractual novelty that combines the advantages of outsourced and captive offshoring operations. In this paper we investigate under which circumstances a BOT outsourcing contract (i.e. a contract where the client firm exercises its call option) is beneficial, or the opposite, to the emerging market vendor firm. Whether BOT outsourcing contracts are boon or bane to an emerging market vendor basically hinges, we submit, on its internal diffusion of client-specific knowledge and capabilities prior to the execution of the call option

    KW - Build-operate-transfer

    KW - Inter-firm linkages

    KW - Offshore outsourcing

    KW - Real options

    KW - Services

    U2 - 10.1016/j.intman.2013.03.001

    DO - 10.1016/j.intman.2013.03.001

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