Outsourcing Through Purchase Contracts and Firm Capital Structure

• 成果类型: Article
• 署名作者: Moon, S. Katie; Phillips, Gordon M.
• 署名单位: University of Colorado System; University of Colorado Boulder; Dartmouth College; National Bureau of Economic Research
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3443
• 发表日期: 2021
• 页码: 363-387
• 关键词: purchase contracting; Outsourcing; capital structure

摘要

We examine firm and industry characteristics associated with outsourcing and the relation between outsourcing and capital structure using a unique database of outsourcing purchase contracts. We find that highly valued, profitable firms with high-value added per employee and suppliers farther away with higher competition are more likely to outsource using purchase contracts. In addition, we document that firms that operate in industries with more severe import penetration and fewer fixed assets are more likely to outsource using purchase contracts. Examining the outside purchase contract and leverage decisions, we find that the outsourcing decision is associated with less leverage. Our results are consistent with firms that choose to use purchase contracts using less leverage to mitigate the potential loss of relation-specific investments of contracting parties that can occur with financial distress or bankruptcy.