Why do Firms Engage in Multi-sourcing?

Justin Lin (), Arijit Mukherjee and Yingyi Tsai

Discussion Papers from University of Nottingham, GEP

Abstract: We provide an explanation for multi-sourcing, which is often found in the real world and refers to the situation where a final goods producer acquires homogenous components from different suppliers. In the presence of imitation under outsourcing, multi-sourcing helps to deter entry by the suppliers into the final goods market and enhances profitability of the outsourcing firm.

Keywords: Entry; Imitation; Multi-sourcing (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:not:notgep:08/43

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