<p class="MsoTitle" style="text-align: justify; line-height: normal; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-family: Times New Roman;"><span style="color: black; font-size: 10pt; font-weight: normal; mso-themecolor: text1;">Because of a dramatic decrease in transportation and telecommunication costs, the digital revolution, and the forces of globalization, off-shoring has accelerated in the past few years.<span style="mso-spacerun: yes;"> </span>While there is little doubt that off-shoring has brought hardship to thousands of workers and communities, there is also little doubt that it has benefited many worker and communities.<span style="mso-spacerun: yes;"> </span>Today, off-shoring continues to generate considerable debate on the long-run impact. Also, there is considerable misunderstanding about this phenomenon.<span style="mso-spacerun: yes;"> </span>In this paper, the authors make a distinction among the </span><span style="color: black; font-size: 10pt; font-weight: normal; mso-themecolor: text1; mso-bidi-font-weight: bold;">terms <span style="mso-bidi-font-style: italic;">outsourcing, offshore outsourcing, and off-shoring</span>.<span style="mso-spacerun: yes;"> </span></span><span style="color: black; font-size: 10pt; font-weight: normal; mso-themecolor: text1;">Off-shoring has been facilitated by a deconstruction of the value chain, allowing firms to evaluate all activities as potential candidates for being performed outside the firm.<span style="mso-spacerun: yes;"> </span>Reasons </span><span style="color: black; font-size: 10pt; font-weight: normal; mso-themecolor: text1; mso-bidi-font-weight: bold;">for the acceleration of off-shoring are outlined.<span style="mso-spacerun: yes;"> </span>An explanation of why off-shoring is not a villain for the developed economies is also provided</span><span style="color: black; font-size: 10pt; font-weight: normal; mso-themecolor: text1;">.</span></span></p>
The accounting rate system currently in place is used to reimburse telephone companies around the world for terminating calls originating in foreign countries. Increased competition in more liberalized countries has led to imbalances between traffic originating in these countries and traffic coming in from less liberalized countries, leading to huge settlement payments being made to less liberalized countries. Some variation in accounting rates across countries can be explained by traditional factors such as the actual cost of terminating calls. Our results suggest that accounting rates are also significantly affected by non-traditional factors such as the extent of government regulation, the level of corruption, and the like. These findings support the need for consideration of these factors in reforming the accounting rate system currently in place. “High settlement rates are a product of oligopolistic cooperation in a market with little transparency and anti-competitive regulation in the majority of nations” [Cowhey, 1998 ; p. 908]. Copyright IAES 2006L96,
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