Diasporas and Outsourcing: Evidence from oDesk and India

Ejaz  Ghani; William R. Kerr; Christopher  Stanton

Article | Management Science | July 2014

Diasporas and Outsourcing: Evidence from oDesk and India

by Ejaz Ghani, William R. Kerr and Christopher Stanton

Abstract

This study examines the role of the Indian diaspora in the outsourcing of work to India. Our data are taken from oDesk, the world's largest online platform for outsourced contracts, where India is the largest country in terms of contract volume. We use an ethnic name procedure to identify ethnic Indian users of oDesk in other countries around the world. We find very clear evidence that diaspora-based links matter on oDesk, with ethnic Indians in other countries 32% (9 percentage points) more likely to choose a worker in India. Yet, the size of the Indian diaspora on oDesk and the timing of its effects make clear that the Indian diaspora was not a very important factor in India becoming the leading country on oDesk for fulfilling work. In fact, multiple pieces of evidence suggest that diaspora use of oDesk increases with familiarity of the platform, rather than a scenario where diaspora connections serve to navigate uncertain environments. We further show that diaspora-based contracts mainly serve to lower costs for the company contacts outsourcing the work, as the workers in India are paid about the market wage for their work. These results and other observations lead to the conclusion that diaspora connections continue to be important even as online platforms provide many of the features that diaspora networks historically provided (e.g., information about potential workers, monitoring, and reputation foundations).

Keywords: Diaspora; ethnicity; outsourcing; oDesk; networks; india; South Asia; Networks; Job Cuts and Outsourcing; Diasporas; Online Technology; Ethnicity; Service Industry; South Asia; India;

Format: Print

Find at Harvard Read Now

Citation:

Ghani, Ejaz, William R. Kerr, and Christopher Stanton. "Diasporas and Outsourcing: Evidence from oDesk and India." Management Science 60, no. 7 (July 2014): 1677–1697.

We use the construction of India's Golden Quadrangle (GQ) central highway network, together with comprehensive loan data drawn from the Reserve Bank of India, to investigate the interaction between infrastructure development and financial sector depth. We identify a disproportionate increase in loan count and average loan size in districts along the GQ highway network using stringent specifications with industry and district fixed effects. Our results hold in straight-line IV frameworks and are not present in “placebo tests” with another highway that was planned to be upgraded at the same time as GQ but subsequently delayed. Importantly, however, results are concentrated in districts with stronger initial financial development, suggesting that while financing does respond to large infrastructure investments and help spur real economic outcomes, initial financial sector development might play an important role in determining where real activity will grow.

This primer provides a comprehensive exploration into the gig economy and how it is reshaping global business. It shows how the Uber driver, the freelancing programmer in India, and the independent corporate consultant are all different variants of the modern-day gig workers. In doing so, this document addresses the following questions: • What are gigs and who performs them? • What is the size of the gig economy? How big will it get? • What types of gig work are available, and how do they differ from one another? • What are major trends in the gig economy, and how could technology disrupt this space? • What are the key management and legal issues for companies that use gig workers? • What has been the recent legal and regulatory history of the gig economy?

Faced with intense competition from Amazon, in 2015 Walmart began a transformation of its operations and workforce. The goal was to create an omnichannel retail experience for customers that seamlessly joined online and offline shopping. This case explores Walmart's efforts to deliver this through investments in its workforce makeup and training, digital infrastructure, and automation technology.

Faculty & Research

Diasporas and Outsourcing: Evidence from oDesk and India

Abstract

Citation:

About the Authors

More from these Authors