Sourcing Premia with Incomplete Contracts: Theory and Evidence
Kohler Wilhelm K () and
Additional contact information
Kohler Wilhelm K: University of Tübingen
The B.E. Journal of Economic Analysis & Policy, 2011, vol. 11, issue 1, 1-39
Drawing on Grossman & Helpman (2004) and Antràs & Helpman (2004), we identify general conditions that result in an unambiguous mapping of a firm’s productivity level into the organizational form and location of its input sourcing. Using a detailed 2006-2008 data set for Spanish manufacturing firms, we then establish a number of stylized facts about firm-level heterogeneity in sourcing strategies that have largely gone unnoticed in existing literature on input sourcing. Finally, we explore this heterogeneity through econometric estimation of productivity premia associated with different sourcing strategies. We find a robustly significant premium on a strategy that features offshore production of intermediate inputs through a related party (vertical integration). Lower productivity premia are found for strategies that rely on outsourcing to unrelated parties abroad or on vertical integration within the home economy. Across all specifications employed, estimated mean productivity is lowest for domestic-outsourcing firms.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32) Track citations by RSS feed
Downloads: (external link)
For access to full text, subscription to the journal or payment for the individual article is required.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejeap:v:11:y:2011:i:1:n:10
Ordering information: This journal article can be ordered from
Access Statistics for this article
The B.E. Journal of Economic Analysis & Policy is currently edited by Hendrik Jürges and Sandra Ludwig
More articles in The B.E. Journal of Economic Analysis & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().