Economic multiplier effect of shared service centres

Abstract

Development of Business Services market influences the growing interest in researches on increase of business value by centralizing business functions and establishment of Shared Service Centres (SSC). SSCs are usually being defined as competitive efficiency oriented business model, which plays an important role in increase of microeconomic value expressed in decreased costs, improved effectiveness and quality of the business processes. However, SSC can be also defined as economic catalyst, implementation of which leads both to microeconomic to macroeconomic value and multiplication of this value. This increase in value is known as multiplier effect, which occurs in different phases of economic value chain. Causality between different forms of Foreign Direct Investments (FDI) such as SSCs and economic growth is usually being expressed by analyzing changes of Gross Domestic Product (GDP). However, there is number of other macroeconomic indicators, which being affected by SSCs. Number of employed in SSCs is one of the indicators, which leads to wages, income, purchasing power, spending, supply and other multiplier effects.