Industry-Specific Human Capital and Wages: Evidence from the Business Process Outsourcing Industry

Kim, K., S. Mithas, J. Whitaker, and P.K. Roy. “Industry-Specific Human Capital and Wages: Evidence from the Business Process Outsourcing Industry,” Information Systems Research (25:3) 2014, 618-638.

42 Pages Posted: 8 Jul 2019

See all articles by Keongtae Kim

Keongtae Kim

Decision Science and Managerial Economics, Chinese University of Hong Kong

Sunil Mithas

University of Maryland - Robert H. Smith School of Business

Jonathan Whitaker

University of Richmond, Robins School of Business

Prasanto Roy

CyberMedia India Ltd.

Date Written: June 2, 2014

Abstract

Human capital is becoming more critical as the global economy becomes more information- and service-intensive. While IS researchers have studied some dimensions of human capital, the role of industry-specific human capital has remained understudied. The IT-enabled business process outsourcing (BPO) industry provides an ideal setting to study returns to human capital, because jobs in this industry are standardized and many professionals in this new industry have come from other industries. We build on IS and Economics literature to theorize returns to human capital in the BPO industry, and we test the theory using data for over 2,500 BPO professionals engaged in call center work and other non-voice services (e.g., accounting, finance, HR, etc.) in India during the 2006-2008 time period. We find higher returns to industry-specific human capital than to firm-specific and general human capital. We also find that junior-level professionals, whose jobs are relatively more standardized, have higher returns to industry-specific human capital than senior-level professionals. We discuss implications for further research and practice in the global economy where inter-industry transfers and migration of skills are becoming increasingly common.

Keywords: global disaggregation, human capital, BPO, outsourcing, professionals, wages, compensation

Suggested Citation

Kim, Keongtae and Mithas, Sunil and Whitaker, Jonathan and Roy, Prasanto, Industry-Specific Human Capital and Wages: Evidence from the Business Process Outsourcing Industry (June 2, 2014). Kim, K., S. Mithas, J. Whitaker, and P.K. Roy. “Industry-Specific Human Capital and Wages: Evidence from the Business Process Outsourcing Industry,” Information Systems Research (25:3) 2014, 618-638.. Available at SSRN: https://ssrn.com/abstract=3415188

Keongtae Kim (Contact Author)

Decision Science and Managerial Economics, Chinese University of Hong Kong ( email )

12 Chak Cheung street
Shatin
Hong Kong

Sunil Mithas

University of Maryland - Robert H. Smith School of Business ( email )

​Van Munching Hall
7699 Mowatt Ln
College Park, MD 20742-1815
United States

HOME PAGE: http://sunilmithas.com/

Jonathan Whitaker

University of Richmond, Robins School of Business ( email )

1 Gateway Road
Richmond, VA 23229
United States
804.287.6524 (Phone)
804.289.8878 (Fax)

Prasanto Roy

CyberMedia India Ltd. ( email )

New Delhi, 110019
India
+91-124-482-2222 (Phone)

HOME PAGE: http://cybermedia.co.in/

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