Page 78 - 臺大管理論叢第33卷第1期

Value Creation and Capture in Developing Countries: The Driver and Mechanism of Offshore Outsourcing
Innovation

Taken together, an outsourcing firm acts as an organizer of knowledge to access and
manage human capital when conducting offshore innovation outsourcing in developing
countries. The availability of human capital in developing countries is then attractive for
outsourcing firms to relocate their innovation activities offshore. An outsourcing firm can

not only create value by accessing human capital, but also capture value by managing
human capital within, between, and among offshore partners. That is, the positive impact
of human capital on location choice is strengthened when a project is designed with a

managing mechanism, either task specificity or project modularity, to capture the value of
outsourcing innovation in developing countries with weak IPR protection.

5.2 Theoretical Contributions
Our study offers several contributions. First, we respond to the recent call for KBV

research on global strategy in IB literature (e.g., Grant and Phene, 2022) by adopting
the KBV perspective as the theoretical lens to explore the topic of offshore outsourcing
innovation in the field of IB research. Drawing on the KBV perspective, we also

complement previous TCE and RBV studies on offshore outsourcing innovation. Since
neither TCE nor RBV can fully explain outsourcing cases featuring higher levels of
disaggregation, we develop a theory of human capital and knowledge partitioning on the
basis of KBV as our major argument to explain why firms take the risk of outsourcing
innovation and how they manage it, particularly in developing countries.

Secondly, we extend the research on the internationalization of innovation by
examining various innovation activities outsourced to developing countries that can
provide abundant human capital for outsourcing firms to create and capture value. While

previous studies on offshore outsourcing innovation have focused on cost advantages (e.g.,
Teirlinck and Spithoven, 2013), innovation outcomes (e.g., Bertrand and Mol, 2013; Nieto
and Rodríguez, 2011), institutional contexts (Sartor and Beamish, 2014), and knowledge
management (e.g., Chen et al., 2012), we adopt the KBV perspective to investigate the
impact of human capital on the decision of offshore innovation outsourcing. With a

better understanding of the way that firms are able to create value through outsourcing
innovation in developing countries, we can contribute to the body of research on the
internationalization of innovation as well as offshore outsourcing innovation.

Thirdly, we contribute to the knowledge on the drivers, moderators, and choices of

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