Onshore Hiring and Restructuring: A Panel Study on Offshoring Companies' Performance

Alina Grecu, Wolfgang Sofka

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Abstract

Firms engage in offshoring activities for various reasons, ultimately to increase competitive advantage. By integrating human capital theories in the strategy-performance models, we propose that hiring decisions regarding sources of human capital affect performance post-offshoring. To test our hypothesis, we use a 2009-2014 panel dataset with 8,172 company-year observations and 1,362 exactly matched Danish companies -681 offshoring and 681 non-offshoring companies -containing financial-, mobility-, and offshoring information. We find that focusing on more internal hiring helps offshoring companies to perform better post-offshoring, whereas hiring from external sources decreases onshore performance. In the offshoring sub-sample of firms, we find that these effects are particularly salient for companies that offshore core activities or to distant-to-home locations. This is in line with our argument that firm-specific human becomes even more valuable post-offshoring, and that internal hiring can boost onshore performance. The paper contributes to the international business and human capital literature and aims to make managers aware of the need for an internal talent pipeline when engaging in offshoring.
Original languageEnglish
Title of host publicationProceedings of the Eighty-second Annual Meeting of the Academy of Management
EditorsSonja Taneja
Number of pages1
Place of PublicationBriarcliff Manor, NY
PublisherAcademy of Management
Publication date2022
Pages2171
DOIs
Publication statusPublished - 2022
EventThe Academy of Management Annual Meeting 2022: Creating a Better World Together - Seattle, United States
Duration: 5 Aug 20229 Aug 2022
Conference number: 82
https://2022.aom.org/

Conference

ConferenceThe Academy of Management Annual Meeting 2022
Number82
Country/TerritoryUnited States
CitySeattle
Period05/08/202209/08/2022
Internet address
SeriesAcademy of Management Proceedings
ISSN0065-0668

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