Researchers have investigated the relationship between IT outsourcing and resulting economic performance. Case study evidence (Lacity et al. 1996; Saunders et al. 1997) has documented cost savings of up to 40 percent. Other studies have examined its value using financial and accounting measures. For instance, Loh and Venkatraman (1995) show that increased levels of IT outsourcing lead to higher financial performance as captured in Tobin’s q and return on equity (ROE). Some studies have found a positive, but weak, impact of IT outsourcing arrangements on stock market returns (Farag and Krishnan 2003; Gurbaxani and Jorion 2005; Hayes et al. 2000), implying that investors expect IT service providers to improve client firm performance through a variety of means, including economies of specialization and scale.