Exploring the link between IT systems and the outsourcing of logistics activities: a transaction cost perspective

Abstract

This study explores the relationship between the expansion of information technology (IT) systems and the outsourcing of logistics activities. Transaction cost theory was adopted to explain this relationship. The research model for this study consists of the degree of IT as an independent variable, the degree of outsourcing of logistics activities as a dependent variable and different types of transaction costs as mediators. The results show that companies that utilise more IT tend to outsource their logistics activities more than those who do not transact electronically, as IT utilisation facilitates outsourcing through reductions in transaction costs.

Keywords:

• outsourcing of logistics activities
• information technology systems
• coordination cost
• operations risk
• opportunism risk
• search cost

Notes

The Cronbach's α coefficients of the variables of this research are shown in Table 9.