STRATEGIC OUTSOURCING UNDER ECONOMIES OF SCALE
Article first published online: 13 SEP 2012
© 2012 The Authors. Bulletin of Economic Research © 2012 Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research.
Bulletin of Economic Research
How to Cite
Chen, Y. and Sen, D. (2012), STRATEGIC OUTSOURCING UNDER ECONOMIES OF SCALE. Bulletin of Economic Research. doi: 10.1111/j.1467-8586.2012.00467.x
- Article first published online: 13 SEP 2012
- economies of scale;
We show that economies of scale in upstream production can lead both the disintegrated downstream firm as well as its vertically integrated rival to outsource offshore for intermediate goods, even if offshore production has a moderate cost disadvantage compared to in-house production of the vertically integrated firm.