The Analysis Of Outsourcing Decision-making Based On Roundabout Production Function And The Research Of MNE's Business Transfer

With the development at full speed of economy and the economic integration degree strengthened further, the change of enterprise's living environment is faster and faster. In order to keep the advantage in keen competition, to obtain better technology with lower cost, and to concentrate energy to develop one's own core capability, more and more enterprises choose to adopt the tactics of all or part outsourcing of the non-core business. The study of outsourcing has been already for quite a long time in foreign, but the study is at the starting stage in China.In terms of resource outsourcing, the operation modes of business can be divided into three types: outsourcing, contracting for supply and insourcing. This paper elaborates the factors affecting outsourcing in detail, such factors as fixed assets input, the price and trade efficiency of production factor, the price and trade efficiency of intermediate goods. This paper establishes an outsourcing decision-making model based on roundabout production function, and analyzes the relation between those factors influence outsourcing decision-making and outsourcing decision-making by the infra-marginal analysis ways.This paper makes a connection between offshore outsourcing and FDI which are two main modes of business transfer for MNE, and attempts to give the answer to the location selection, the product selection and the modes selection of MNE's business transfer under a model frame of 4 × 3 × 2 ( four kinds of country: Post-industrialization country, industrialization country, dual economy country and agriculture country; three kinds of business: labor-intensive manufacturing operations, capital-intensive manufacturing operations and modern service type operations; two kinds of modes: offshore outsourcing and FDI). Adopting the dynamic view, explain the migration trend of outsourcing, including the trend of the industry moves and position moves.Finally, under the model frame of 4 × 3 × 2, according to the preceding conclusion, this paper has deduced the relationship among division of labor among enterprises, MNE's business transfer, industry upgrading, economic development and industry's...