The Economics of Outsourcing in a De-integrating Industry

Jawaid Abdul Ghani and Arif Iqbal Rana
Additional contact information
Jawaid Abdul Ghani: LUMS

Microeconomics Working Papers from East Asian Bureau of Economic Research

Abstract: Many large firms in low scale economy industries are actively considering outsourcing options, in the face of competition from smaller more efficient players. Based on a review of the theoretical literature and a case-study of outsourcing decisions at two large vertically integrated footwear manufacturers in Pakistan, a framework is developed for determining which set of products and activities to outsource and which to keep in-house. The framework suggests activities being considered for outsourcing be evaluated in terms of level of proprietary knowledge, economies of scale, inefficiencies of vertical integration, transactional costs, and the existence of reliable vendors. It is suggested that activities with low levels of proprietary knowledge and activities where cost savings due to outsourcing justify the increased transaction costs, should be outsourced.

Keywords: footwear; Outsourcing; Pakistan; case-study (search for similar items in EconPapers)
JEL-codes: D00 D01 D21 D23 (search for similar items in EconPapers)
Date: 2005-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.eaber.org/node/22241 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 301 [REDIRECT LOOP] Moved Permanently (http://www.eaber.org/node/22241 [301 Moved Permanently]--> https://www.eaber.org/node/22241 [301 Moved Permanently]--> https://www.eaber.org/node/22241 [301 Moved Permanently]--> https://www.eaber.org/node/22241 [301 Moved Permanently]--> https://www.eaber.org/node/22241 [301 Moved Permanently]--> https://www.eaber.org/node/22241 [301 Moved Permanently]--> https://www.eaber.org/node/22241 [301 Moved Permanently]--> https://www.eaber.org/node/22241)

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:eab:microe:22241

Access Statistics for this paper

More papers in Microeconomics Working Papers from East Asian Bureau of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Shiro Armstrong ().