How does outsourcing affect developing countries? : The case of Ghana and Vietnam in comparison with China and India

Sammanfattning: Purpose – The aim of this study is to explore how outsourcing affects developing countries. The effects are examined for Ghana and Vietnam, which have recently become attractive outsourcing locations. They are compared with China and India, both well known for their outsourcing sectors and their attractiveness as outsourcing locations.   Design/methodology/approach – In this research paper an exploratory method is applied. During the examination economic data provided by supranational organizations is used to measure the effects of outsourcing. Data is collected to match the requirements of the applied triangular model for measuring. Background for the data collection is the triangular model by Granger. Key figures for observation are Gross Domestic Product (GDP), Foreign Direct Investment (FDI), exports, and their correlations. Validity and reliability is ensured through cross examination of the model.   Findings – The effects of outsourcing vary a lot. All key figures rose in general during the observed 30 years, from 1981 till 2010. The correlations show that there are eventual relations of the figures, although direct relations each by each year are not found. The most remarkable finding is that FDI might indeed push the exports. Export rates are rising in the years after the investment is done. The relation of FDI and GDP show that there can be interrelations as well, but if the GDP is increased in higher rates than the FDI is done. An overall result of the examination is that Vietnam seems to rely heavily on outsourcing as they export almost ¾ of the fabrications whereas it is assumed that Ghana tries more on development and improvement of the whole economy.   Originality/value – This research paper looks at the often discussed phenomenon outsourcing by focussing on its economic effects by focussing on the effects for the developing countries Vietnam and Ghana. It provides the reader with new aspects to be considered in the surrounding of outsourcing. Further investigations are necessary to explore if the found can be generalised.