Input Specificity And Global Sourcing
- Tags:
- Business Operations,
- HEC Montreal,
- It Operations,
- Outsourcing,
- Outsourcing & Subcontracting,
- Sourcing
- Source:
- HEC Montreal
FREE Registration is required
Overview: This paper investigates the role of productivity on a firm's organizational choice. We set up an industry-equilibrium model in which heterogeneous firms concurrently choose their type of inputs, ownership structure and location of production. In choosing their type of inputs, firm's trade o the extra customization costs of adopting generic inputs against the reduced hold-up friction that generic outsourcing entails. We demonstrate that the hold-up friction under generic outsourcing increases with a firm's productivity. In our model, this implies that: high productivity firms choose vertical integration to the South; medium-high productivity firms choose ideal outsourcing to the South; and medium-low productivity firms choose generic outsourcing to the South, and low productivity firms choose generic outsourcing to the North.
(Is this item miscategorized? Does it need more tags? Let us know.)
Format: PDF | Size: 430KB | Date: May 2006 | Pages: 31
People who downloaded this item also downloaded
 |
Mental Models -- Steps Towards Systems Thinking |
|
Supplier Relationship Management and Procurement: Driving Value Through Best Practices |
|
Best Practices |
