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Diasporas and Outsourcing: Evidence from oDesk and India

Ejaz Ghani (), William Kerr () and Christopher Stanton ()
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Christopher Stanton: Finance Department, University of Utah, Salt Lake City, Utah 84112

Management Science, 2014, vol. 60, issue 7, 1677-1697

Abstract: We examine the role of the Indian diaspora in the outsourcing of work to India. Our data are taken from oDesk, the world's largest online platform for outsourced contracts. Despite oDesk minimizing many of the frictions that diaspora connections have traditionally overcome, diaspora connections still matter on oDesk, with ethnic Indians substantially more likely to choose a worker in India. This higher placement is the result of a greater likelihood of choosing India for the initial contract and substantial path dependence in location choices. We further examine wage and performance outcomes of outsourcing as a function of ethnic connections. Our examination of potential rationales for the greater ethnic-based placement of contracts assesses taste-based preferences and information differences. This paper was accepted by Lee Fleming, entrepreneurship and innovation.

Keywords: diaspora; ethnicity; outsourcing; oDesk; networks; India; South Asia (search for similar items in EconPapers)
Date: 2014
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http://dx.doi.org/10.1287/mnsc.2013.1832 (application/pdf)

Related works:
Working Paper: Diasporas and outsourcing: evidence from oDesk and India (2013) Downloads
Working Paper: Diasporas and Outsourcing: Evidence from oDesk and India (2012) Downloads
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