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Using transaction cost economics to explain outsourcing of accounting

(2010) SMALL BUSINESS ECONOMICS. 35(1). p.93-112
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Abstract
This study explores whether SMEs involved in the outsourcing of accounting tasks differ, in terms of transactional and personal (CEO) characteristics, from others that perform the same tasks within the company. We rely on the transaction cost economics (TCE) model, while controlling for age, educational background, and trust of the SME executive in the external accountant. A survey was developed to investigate the outsourcing by Belgian SMEs both of routine (entry of invoices, interim reporting) and non-routine (period-end accounting, preparation of financial statements) accounting tasks. For the routine accounting tasks, frequency was significantly associated with outsourcing. Meanwhile, for non-routine accounting tasks, asset specificity and frequency were significantly associated. High-frequency tasks were associated with lower levels of outsourcing. Similarly, higher asset specificity was associated with lower levels of outsourcing. Furthermore, the educational background of the CEO, as well as the CEO's level of trust in the external accountant, was significantly associated with outsourcing, confirming the upper echelon theory. Having a more educated CEO was associated with lower levels of outsourcing, both for routine and non-routine accounting tasks.
Keywords
VERTICAL INTEGRATION, ENTRY-MODE CHOICE, OR-BUY DECISIONS, SMALL FIRMS, UNITED-STATES, TRUST, PERFORMANCE, INDUSTRY, ORGANIZATION, PERSPECTIVE, Accounting, SME, Transaction cost economics, Outsourcing

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Chicago
Everaert, Patricia, Gerrit Sarens, and Jan Rommel. 2010. “Using Transaction Cost Economics to Explain Outsourcing of Accounting.” Small Business Economics 35 (1): 93–112.
APA
Everaert, P., Sarens, G., & Rommel, J. (2010). Using transaction cost economics to explain outsourcing of accounting. SMALL BUSINESS ECONOMICS, 35(1), 93–112.
Vancouver
1.
Everaert P, Sarens G, Rommel J. Using transaction cost economics to explain outsourcing of accounting. SMALL BUSINESS ECONOMICS. 2010;35(1):93–112.
MLA
Everaert, Patricia, Gerrit Sarens, and Jan Rommel. “Using Transaction Cost Economics to Explain Outsourcing of Accounting.” SMALL BUSINESS ECONOMICS 35.1 (2010): 93–112. Print.
@article{697146,
  abstract     = {This study explores whether SMEs involved in the outsourcing of accounting tasks differ, in terms of transactional and personal (CEO) characteristics, from others that perform the same tasks within the company. We rely on the transaction cost economics (TCE) model, while controlling for age, educational background, and trust of the SME executive in the external accountant. A survey was developed to investigate the outsourcing by Belgian SMEs both of routine (entry of invoices, interim reporting) and non-routine (period-end accounting, preparation of financial statements) accounting tasks. For the routine accounting tasks, frequency was significantly associated with outsourcing. Meanwhile, for non-routine accounting tasks, asset specificity and frequency were significantly associated. High-frequency tasks were associated with lower levels of outsourcing. Similarly, higher asset specificity was associated with lower levels of outsourcing. Furthermore, the educational background of the CEO, as well as the CEO's level of trust in the external accountant, was significantly associated with outsourcing, confirming the upper echelon theory. Having a more educated CEO was associated with lower levels of outsourcing, both for routine and non-routine accounting tasks.},
  author       = {Everaert, Patricia and Sarens, Gerrit and Rommel, Jan},
  issn         = {0921-898X},
  journal      = {SMALL BUSINESS ECONOMICS},
  keywords     = {VERTICAL INTEGRATION,ENTRY-MODE CHOICE,OR-BUY DECISIONS,SMALL FIRMS,UNITED-STATES,TRUST,PERFORMANCE,INDUSTRY,ORGANIZATION,PERSPECTIVE,Accounting,SME,Transaction cost economics,Outsourcing},
  language     = {eng},
  number       = {1},
  pages        = {93--112},
  title        = {Using transaction cost economics to explain outsourcing of accounting},
  url          = {http://dx.doi.org/10.1007/s11187-008-9149-3},
  volume       = {35},
  year         = {2010},
}

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