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Headquarter intensity and the choice between outsourcing versus integration at home or abroad

Stefano Federico

Industrial and Corporate Change, 2012, vol. 21, issue 6, 1337-1358

Abstract: This article provides an empirical analysis of the choice between outsourcing and integration, with a distinction based on whether production is carried out at home or abroad. Using firm-level data for Italy, we find that the preference for integration over outsourcing is positively related to indicators of headquarter intensity, notably capital intensity, and to firm-level productivity. We also find that foreign sourcing strategies are not independent from domestic sourcing strategies. Overall, the evidence provides support to models based on relationship-specific investments. Copyright 2012 The Author 2012. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Date: 2012
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Handle: RePEc:oup:indcch:v:21:y:2012:i:6:p:1337-1358