An alternative theory, neoclassical economics (reviewed in Williamson 1985), posits that firms outsource IT to attain cost advantages from assumed economies of scale and scope possessed by vendors (Ang and Straub 1998; Loh and Venkatraman 1992a; Slaughter and Ang 1996). This theory has attained more empirical support in studies of out- sourcing decisions than TCE (Ang and Cummings 1997; Ang and Straub 1998; Casale 2000, 2001; Loh and Venkatraman 1992a, 1992b; Slaughter and Ang 1996; Walker and Weber 1984). However, the economies of scale and scope argu- ment would predict that outsourcing has little to offer larger firms, because they can generate economies of scale and scope internally by repro- ducing the production methods used by vendors. The data on outsourcing, however, indicates that many large firms continue to pursue outsourcing arrangements (Chabrow 2002; McDougall 2002).