Subnational variations in resilience strategies to adverse contexts in global value chains: evidence from Pakistani offshoring services providers

What is it about?

Many international companies outsource software development to firms in countries like Pakistan. But within these countries, different cities can face very different challenges—some areas experience frequent political violence, while others may be more stable but still suffer from negative global perceptions. This study is one of the first to show how differences between cities within the same country (subnational regions) shape how suppliers stay resilient and continue delivering high-quality work in global value chains (GVCs). We studied software service providers in Karachi and Lahore, Pakistan’s two largest cities. Firms in Karachi, exposed to constant disruption, invested in remote working tools and robust internal processes to keep going. Meanwhile, Lahore-based firms, facing occasional instability and reputational concerns, focused on being highly visible and responsive to international clients—using real-time updates, transparent processes, and flexible project adjustments. Our key insight: resilience is not one-size-fits-all. Firms develop different strategies depending on their local context—even when serving the same global clients.

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Why is it important?

This has important implications for international managers. Companies outsourcing to politically diverse regions should avoid treating entire countries as uniform. Instead, they should evaluate the specific subnational context of their suppliers and tailor governance strategies—such as how much oversight, flexibility, or codification is needed. Understanding these local dynamics helps build stronger, more resilient global partnerships.