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Some of the off-shoring is done internally by moving services from parent companies to its foreign affiliates, while some are outsourced internationally to third-party services providers (UNCTAD, 2006).
Offshoring and its impact on FDI
Outward FDI may arise as the offshoring of services gathers more speed and touches more and more white-collar workers. Advances in information and communications technology (ICT) have made all information-intensive services more tradable: they can now be produced in one place and consumed in another. Offshoring allows, for the first time, an international division of labor in the production of services (mirroring what is already occurring in manufacturing)—with all its advantages (and risks)...
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