Concurrent sourcing as a termination safeguard

Niels Peter Mols and Paula Sarita Bigio Schnaider

International Journal of Procurement Management, 2023, vol. 17, issue 1, 138-150

Abstract: This paper discusses the conditions under which concurrent sourcing is an effective safeguard. Relying on the transaction cost and the resource-based theories, we develop a conceptual model to argue that concurrent sourcing shortens the period that a buyer needs in order to internalise production and thus, it shortens the period in which an external supplier is able to hold-up a buyer. Concurrent sourcing also allows for short run expansion of production and reduces costs of lost customers. However, when complementarities and diseconomies of scale make concurrent sourcing an efficient choice for a buyer, the same complementarities and diseconomies of scale also weaken the threat that the internal production unit may replace the external supplier.

Keywords: concurrent sourcing; parallel production; safeguards. (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=130268 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijpman:v:17:y:2023:i:1:p:138-150

Access Statistics for this article

More articles in International Journal of Procurement Management from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().