Analysis On Influence Factors Of Host Country’s Competitiveness Of Undertaking Service Outsourcing

In recent years, we have seen a very hot phenomenon that many industry geographically relocated, especially in service industry and Advanced manufacturing. At the same time, Outsourcing has been a major kind of industry relocation and be preferred by many underdeveloped counties since it has tiny influence to environment, low need to energy, high added value And can create more jobs.even though negative effect from subprime mortgage crisis and European debt crisis make the volume of outsource slow down, outsource would be an engine to the world economic development. This paper aims to explore the critical factors influencing the competitveness of host country’s undertaking services outsourcing and the weakness of china compared to other host country,and how to improve it.Although outsource is a micro-decision made by enterprises, but its prevailing prospect is exactly because the further development of globalization, and it is a very important channel for underdeveloped countries to get into international market division. In this paper,we would start with the he theory of comparative advantage, Factor endowment theory, The theory of economy of scale,transaction cost theory and national competitive advantage theory to explain how outsource come and grow. Basing on that and combined with existing academic achievement, we come up with six elements that would has much to do with the outsource development in below: economic scale,human capital,index of economic freedom, infrastructure, the development of service industry and protect to intellectual property. using panel data model to make regression on the sample of38countries.Meanwhile I divide original smple into two sub samples:one is sample of developed countries, another is developing countries, and make divided regression for them.Empirical analysis show that economic scale, the development of the service sector, human capital, infrastructure and protect to intellectual property are the five elements that has the most influence to outsource development of developing countries.economic scale and infrastructure respectively has the most and the minimum influence on the development of outsourcing.that mens the customor especially consider the economic scale. But for developed countries, economic scale and human resource are the most positive facors,but the development of service industry and infrastracture has negative influence.Through the contrast the competitiveness influencing factors between China and other major undertaking service outsourcing country, we analysising the existing problems of China’s service outsourcing:policy support is not enough, lack of intellectual property,lagging development of service industry,inadequacy of enterprise ability and lack of industry organization.Finally, Combining with the empirical analysis of the before, we have come up with some constructional advice to improve national competitiveness to attract outsource.