Information technology (IT) outsourcing, including foreign or offshore outsourcing, has been steadily growing over the last two decades. This growth in IT outsourcing has led to the development of different hubs of services across nations, and has resulted in increased competition among service providers. Firms have been using IT outsourcing to not only leverage advanced technologies and services at lower costs, but also to maintain their competitive edge and grow. Furthermore, as prior studies have shown, there are systematic differences among industries in terms of the degree and impact of IT outsourcing. This dissertation uses a three-study approach to investigate issues related to IT outsourcing at the macro and micro levels, and provides different perspectives for understanding the issues associated with IT outsourcing at a firm and industry level. The first study evaluates the diffusion patterns of IT outsourcing across industries at aggregate level and within industries at a firm level. In addition, it analyzes the factors that influence the diffusion of IT outsourcing and tests models that help us understand the rate and patterns of diffusion at the industry level. This study establishes the presence of hierarchical contagion effects in the diffusion of IT outsourcing. The second study explores the role of location and proximity of industries to understand the diffusion patterns of IT outsourcing within clusters using the spatial analysis technique of space-time clustering. It establishes the presence of simultaneous space and time interactions at the global level in the diffusion of IT outsourcing. The third study examines the development of specialized hubs for IT outsourcing services in four developing economies: Brazil, Russia, India, and China (BRIC). In this study, I adopt a theory-building approach involving the identification of explanatory anomalies, and propose a new hybrid theory called- knowledge network theory. The proposed theory suggests that the growth and development of the IT and related services sector is a result of close interactions among adaptive institutions. It is also based on new knowledge that is created, and which flows through a country's national diaspora of expatriate entrepreneurs, technologists and business leaders. In addition, relevant economic history and regional geography factors are important. This view diverges from the traditional view, wherein effective institutions are considered to be the key determinants of long-term economic growth.

Regional differences of inventive activity and economic growth are important in economic geography. These differences are generally explained by the theory of localized knowledge spillovers, which argues that geographical proximity among economic actors fosters invention and innovation. However, knowledge production involves an increasing number of actors connecting to non-local partners. The space of knowledge flows is not tightly bounded in a given territory, but functions as a network-based system where knowledge flows circulate around alignments of actors in different and distant places. The purpose of this dissertation is to understand the dynamics of network aspects of knowledge flows in American biotechnology. The first research task assesses both spatial and network-based dependencies of biotechnology co-invention across 150 large U.S. metropolitan areas over four decades (1979, 1989, 1999, and 2009). An integrated methodology including both spatial and social network analyses are explicitly applied and compared. Results show that the network-based proximity better defines the U.S. biotechnology co-invention urban system in recent years. Co-patenting relationships of major biotechnology centers has demonstrated national and regional association since the 1990s. Associations retain features of spatial proximity especially in some Midwestern and Northeastern cities, but these are no longer the strongest features affecting co-inventive links. The second research task examines how biotechnology knowledge flows circulate over space by focusing on the structural properties of intermetropolitan co-invention networks. All analyses in this task are conducted using social network analysis. Evidence shows that the architecture of the U.S. co-invention networks reveals a trend toward more organized structures and less fragmentation over the four years of analysis. Metropolitan areas are increasingly interconnected into a large web of networked environment. Knowledge flows are less likely to be controlled by a small number of intermediaries. San Francisco, New York, Boston, and San Diego monopolize the central positions of the intermetropolitan co-invention network as major American biotechnology concentrations. The overall network-based system comes close to a relational core/periphery structure where core metropolitan areas are strongly connected to one another and to some peripheral areas. Peripheral metropolitan areas are loosely connected or even disconnected with each other. This dissertation provides empirical evidence to support the argument that technological collaboration reveals a network-based system associated with different or even distant geographical places, which is somewhat different from the conventional theory of localized knowledge spillovers that once dominated understanding of the role of geography in technological advance.