Bi-sourcing in the global economy
成果类型：
Article
署名作者：
Do, Julan; Lu, Yi; Tao, Zhigang
署名单位：
University of Hong Kong; University of Hong Kong; University of Hong Kong
刊物名称：
JOURNAL OF INTERNATIONAL ECONOMICS
ISSN/ISSBN：
0022-1996
DOI：
10.1016/j.jinteco.2009.01.005
发表日期：
2009
页码：
215-222
关键词：
摘要：
In organizing production, many firms conduct bi-sourcing, i.e., acquiring the same set of inputs both by buying from external suppliers (outsourcing) and carrying out in-house production (insourcing). We show that, by adopting the bi-sourcing strategy, firms can use the payoff from one supplier as a backup option in negotiating with the other supplier (the cross-threat effect). When firms conduct bi-sourcing in the global economy consisting of the high-waged North and low-waged South, they need to make the location choice for both insourcing and outsourcing. We find that the low wage in the South can encourage investment by component suppliers (the cost effect). However, firms may achieve a better cross-threat effect by relocating overly strong component supplier from the cost.-advantageous South to the cost-disadvantageous North (the balancing effect). The optimal bi-sourcing strategy is determined by the interplay of the cost effect and the balancing effect. (C) 2009 Elsevier B.V. All rights reserved.