The decision to outsource organizational activities is studied widely, but research on the aftermath of outsourcing decisions and the insourcing of outsourced activities is scarce. We study outsourcing decision as a process not an event, and investigate the influences of organizational mechanisms on its sustainability. We argue that organizational learning from the outsourcing decision process could over time result in competencies that would enhance the sustainability of outsourcing decisions. We examine outsourcing and insourcing processes longitudinally among 64 public services in 1,650 local governments across 25 years. The results from regression analysis generally support our theory that the outsourcing process mechanisms, especially the mechanisms associated with implementing the outsourcing decision, predict the occurrence of insourcing. We discuss the implications of our organizational behavioural study of outsourcing decisions for future research on outsourcing and insourcing of public services.

This paper studies philanthropy by multinational enterprises (MNEs) during institutional disruptions—the sudden and unexpected, temporary, and systemic breakdowns in market-oriented institutions. The central argument is that, under institutional disruptions, MNEs aim to restore factors that are essential for the market to function, such as infrastructure and labor markets, and the strength of the market restoration motive is positively associated with the economic importance of the affected country to the MNE. Analyses of donations from 2,000 MNEs headquartered in 63 countries in the aftermath of 265 major epidemics, natural disasters, and terrorist attacks affecting 129 countries suggest that the economic importance of the country to the firm strongly explains donations. Country market concentration, public aid, and the country’s regulatory quality moderate this effect. These associations are robust to a matching method; a vector of firm-, country-, and event-specific time-varying and -constant variables; and alternative motives, such as reputation, altruism, media salience, market standing, and poverty-gap avoidance. They offer evidence that company philanthropy in the aftermath of institutional disruptions may deviate from predicted behavior under stable conditions. Particularly, the findings contest the expectation that philanthropy rises in market competition. Monopolistic firms are comparatively large donors and may act as an economic stop-loss mechanism during large disruptions.

Research Summary This paper examines whether ownership rights to strategic assets within firms affects innovation. Although existing research maintains that strategic assets can be leveraged freely within the firm, many firms allocate ownership rights to strategic assets to business units or subsidiaries. While scholars have examined strategic asset ownership rights as a tool for tax avoidance, scholars have yet to study its effects on innovation. In the context of multinational firms, I find evidence that subsidiaries with ownership rights produce more technological innovations and are more responsive to shocks to R&D opportunity than those without ownership rights. Additionally, the results provide evidence of the cost of tax avoidance strategies. When subsidiaries in technologically advantaged locations do not hold ownership rights, they produce fewer and less impactful innovations. Managerial Summary A key decision made by multinational firms is which subsidiaries should hold ownership rights to the firm's strategic assets. The choice often entails a trade‐off between allocating ownership rights to subsidiaries best positioned to innovate and manage the strategic asset versus to subsidiaries in income shielding locations to reduce the firm's tax bill. This paper examines whether subsidiary strategic asset ownership rights matter for subsidiary innovation. I find evidence that subsidiaries with ownership rights produce greater quantity and quality of innovations and are more responsive to changes in R&D opportunity than subsidiaries without ownership rights. This study highlights an important ramification of tax avoidance strategies: locating strategic asset ownership rights away from subsidiaries in regions of expertise can adversely affect innovation within the firm.

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