What is the impact of labor displacement on management consulting services?

Edouard Ribes ()
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Edouard Ribes: CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique

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Abstract: Labor displacement off-or nearshore is a performance improvement instrument that currently sparks a lot of interest in the service sector. This article proposes a model to understand the consequences of such a decision on management consulting firms. Its calibration on the market of consulting services for the German transportation industry highlights that, under realistic assumptions, labor displacement translates in price decrease by-0.5% on average per year and that for MC practices to remain competitive/profitable they have to at least increase the amount of work they off/nears shore by +0.7% a year.

Keywords: Professional Services; Labor displacement; Firm growth; Offshoring (search for similar items in EconPapers)
Date: 2020-12-29
Note: View the original document on HAL open archive server: https://hal.science/hal-03090593v1
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