Co-Diffusion Effects in Software Sourcing Arrangements

This study analyzes the temporal diffusion of software sourcing arrangements by applying innovation diffusion theories. The study tests the co-diffusion effects 1) between onshoring and offshoring and 2) between insourcing and outsourcing. The results from the analysis indicate the existence of one-way complementary co-diffusion effects between on-shoring and offshoring and between outsourcing and in-housing. Positive, significant effects of innovation were found for in-housed, on-shored, and offshored software projects. Furthermore, a negative, significant effect of imitation was found for outsourced software projects. Indications were co-diffusion effects are stronger than diffusion effects.