Strategic Outsourcing Under Economies of Scale

Chen, Yutian; Sen, Debapriya

doi:10.1111/j.1467-8586.2012.00467.x

Cited by 8 publications

(4 citation statements)

References 11 publications

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“…However, given the technological developments of the last few decades, searching costs have decreased, benefiting both large and small companies. Chen and Sen (2015) propose that the effect of scale economies can drive both integrated and disintegrated downstream firms to offshore intermediate goods. In a context of economies of scale in upstream production, a disintegrated downstream firm would tend to purchase intermediate goods from a pure offshore provider rather than its vertically integrated rival.…”

Section: Empirical Model and Variablesmentioning

confidence: 99%

Determinants of internal and external R&D offshoring: evidence from Spanish firms

Tamayo

Huergo

2016

Industry and Innovation

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This paper analyzes the determinants of R&D offshoring of Spanish firms using information from the Panel of Technological Innovation. We find that being an exporter, international technological cooperation, continuous R&D engagement, applying for patents, being a foreign subsidiary, and firm size are factors that positively affect the decision to offshore R&D. In addition, we find that a lack of financing is an obstacle relatively more important for independent firms than for firms that belong to business groups. For these latter, we also obtain that the factors that influence the decision to offshore R&D differ depending on whether the firm purchases the R&D services within the group or through the market: a higher degree of importance assigned to internal sources of information for innovation as compared to market sources increases (decreases) the probability of R&D offshoring only through the group (market).JEL Classification: L24, O32.

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Section: Empirical Model and Variablesmentioning

confidence: 99%

Determinants of internal and external R&D offshoring: evidence from Spanish firms

Tamayo

Huergo

2016

Industry and Innovation

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“…Given that the incumbent manufacturer can offer a belowcost price to induce the new entrant to enter the procurement contract, a sensible supplier must take some strategic actions to gain from the product system. However, it is unwise to blindly engage in a price war with the incumbent manufacturer since it may lead to a loss situation 8 . Hence, offering a favorable term to the incumbent appears to be a better option.…”

Section: 1mentioning

confidence: 99%

“…Previous studies have focused on outsourcing strategies (decisions) of manufacturers. Research has studied varieties factors that impact firm's outsourcing decision, including production cost [3,28,32,12,13,34,44], operational risk [46], supply uncertainty [5,23,38,37], product quality [31,48], quality investment [40], scale economies [19,8], customer returns [30]. Ghamat et al [15] consider the setting where a competitive contract manufacturer has a limited capacity and shows that the original brand manufacturer might multisource its component only when competition in the final product market is intense.…”

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confidence: 99%

Strategic outsourcing decisions of new entrant and competing incumbent manufacturer in a supply chain with common supplier

Liu

Huang

Zhang

et al. 2023

JIMO

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<p style='text-indent:20px;'>We characterize outsourcing strategies and their interaction between the incumbent manufacturer and the new entrant in a supply chain with the common supplier. The incumbent manufacturer and the supplier can provide the critical components to the entrant, and we will investigate how the incumbent manufacturer competes with the new entrant and whether the common supplier can benefit from the new outsourcing. We find the incumbent benefits from the new entrant's outsourcing to a monopoly supplier, and it is rational and more profitable for the incumbent to cooperate with the new one. Then, we analyze the supplier's response to the incumbent's strategic behavior and reveal that a rational supplier would offer the incumbent a more favorable price. Counter-intuitively, the supplier may benefit if the entrant possesses more bargaining power.</p>

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“…However, given the technological developments of the last few decades, searching costs have decreased, benefiting both large and small companies. Chen and Sen (2012) propose that the effect of scale economies can drive both integrated and disintegrated downstream firms to offshore intermediate goods. In a context of economies of scale in upstream production, a disintegrated downstream firm would tend to purchase intermediate goods from a pure offshore provider rather than its vertically integrated rival.…”

Section: Empirical Model and Variablesmentioning

confidence: 99%

Determinants of Internal versus External R&D Offshoring: Evidence from Spanish Firms

Plata

Huergo

2014

SSRN Journal

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This paper analyzes the determinants of R&D offshoring of Spanish firms using information from the Panel of Technological Innovation. We find that being an exporter, continuous R&D engagement, applying for patents, being a subsidiary, and firm size are factors that positively affect the decision to offshore R&D. In addition, we obtain that the factors that influence this decision for firms that belong to a business group differ depending on whether the firm purchases R&D services within the group or through the market: the lack of information is an obstacle relatively less important for internal R&D offshoring than for external R&D offshoring, while a higher degree of importance assigned to institutional and market sources of information for innovation as compared to internal sources increases the probability of R&D offshoring through the market.JEL Classification: L24, O32.

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Strategic Outsourcing Under Economies of Scale

Cited by 8 publications

References 11 publications

Determinants of internal and external R&D offshoring: evidence from Spanish firms

Determinants of internal and external R&D offshoring: evidence from Spanish firms

Strategic outsourcing decisions of new entrant and competing incumbent manufacturer in a supply chain with common supplier

Determinants of Internal versus External R&D Offshoring: Evidence from Spanish Firms

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