In or Out: How Insourcing Foreign Input Production Affects Domestic Production

Arvanitis, Spyros; Bolli, Thomas; Stucki, Tobias (2017). In or Out: How Insourcing Foreign Input Production Affects Domestic Production Management International Review, 57(6), pp. 879-907. Springer Berlin Heidelberg 10.1007/s11575-017-0322-2

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When a firm imports inputs from foreign countries, the management faces two options: buying from unaffiliated firms or insourcing the foreign production. This paper suggests that this decision directly affects domestic production because international insourcing affects the operational flexibility and the firms' opportunities for accessing knowledge and capabilities developed abroad. Empirical results based on firm-level data of Swiss firms confirm this hypothesis. Concretely, the insourcing of international production increases domestic productivity, decreases (at least in the short run) domestic employment and possibly investments. In line with transaction cost literature, we observe that contractual hazards moderate these effects.

Item Type:

Journal Article (Original Article)

Division/Institute:

Department of Business
Department of Business > Institut Sustainable Business

Name:

Arvanitis, Spyros; Bolli, Thomas and Stucki, Tobias

ISSN:

0938-8249

ISBN:

1127701525

Publisher:

Springer Berlin Heidelberg

Language:

English

Submitter:

Tobias Stucki

Date Deposited:

29 Jan 2019 09:05

Last Modified:

06 Aug 2019 14:33

Publisher DOI:

10.1007/s11575-017-0322-2

Uncontrolled Keywords:

Contractual hazards, Domestic production, Governance mode, Imports, International insourcing, Productivity

ARBOR DOI:

10.24451/arbor.65

URI:

https://arbor.bfh.ch/id/eprint/65

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