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The impact of market liberalization on vertical scope: the case of Argentina
Author(s) -
Toulan Omar N.
Publication year - 2002
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.237
Subject(s) - scope (computer science) , outsourcing , liberalization , incentive , competition (biology) , industrial organization , economics , value (mathematics) , inflation (cosmology) , economies of scope , core (optical fiber) , business , international economics , market economy , microeconomics , economies of scale , marketing , ecology , physics , materials science , machine learning , theoretical physics , computer science , composite material , biology , programming language
This paper analyzes the impact of market liberalization on the vertical scope of firms. Using the case of Argentina, it is shown how the opening of the economy can improve contracting abilities and heighten competition, increasing the ability and incentive of firms to outsource. Survey findings support the main hypothesis as well as the specific importance of reforms relating to inflation, import costs, and heightened demand standards in increasing the use of outsourcing. A case study of the steel producer Siderar, highlights that while firms may reduce their presence in peripheral activities, they may also increase their presence in core areas so as to increase their value proposition. Copyright © 2002 John Wiley & Sons, Ltd.