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INTRODUCTION
One of the most impactful recent trends in international business has been the global outsourcing of business services, such as IT, software development, call centers, administrative services, and knowledge work (Doh, 2005; Kenney, Massini, & Murtha, 2009; Manning, Massini, & Lewin, 2008; Mudambi, 2008). Across industries, client firms, particularly from the US and Western Europe, outsource business processes to specialized service providers across the world (Couto, Mani, Sehgal, Lewin, Manning, & Russell, 2008; Massini, Perm-Ajchariyawong, & Lewin, 2010; Mudambi & Venzin, 2010). This has spurred a significant growth in the service provider industry which is populated by both large players offering a variety of services (such as US-based Accenture, IBM, and HP, and India-based Infosys, Genpact, and Wipro) and numerous more specialized small and midsize providers.
In this article, we seek to understand how service providers geographically configure their international activities to serve global clients. Recent studies have indicated that service providers from both developed and developing countries have started expanding their operations beyond their home countries to foster a new form of global connectivity that optimizes services provision integration with their clients (e.g., Jayaraman, Narayanan, Luo, & Swaminathan, 2013; Kedia & Lahiri, 2007; Lorenzen & Mudambi, 2013; Luo, Wang, Zheng, & Jayaraman, 2012). Specifically, research indicated that service providers are establishing so-called Global Delivery Models (GDMs) (Ang & Inkpen, 2008; Carmel, 2006; Garud, Kumaraswamy, & Sambamurthy, 2006; Govindarajan & Ramamurti, 2011; Niosi & Tschang, 2009), which can be understood as a particular service delivery structure that "balances the need for proximity (for close coordination) with the need for access to technical capabilities and lower offshore costs" (Carmel, 2006: 46).
Yet our knowledge of firm internationalization in support of GDMs is still rather limited. In particular, while it is well known that providers in business-to-business (B2B) industries often follow the global footprint of major clients to generate co-location advantages (Chen & Chen, 1998; Chittoor, Sarkar, Ray, & Aulakh, 2009; Hitt, Bierman, Uhlenbruck, & Shimizu, 2006; Martin, Swaminathan, & Mitchell, 1998), the implications for professional services are not so clear. Compared with manufacturing, geographic distance in business services has typically been conceived of as less important, especially since information and communication technology (ICT), service digitalization and process commoditization have decreased costs of long-distance communication (Apte...