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Concurrence et la localisation des chaînes de montage outre‐mer.
Author(s) -
Swenson Deborah L.
Publication year - 2007
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1365-2966.2007.00403.x
Subject(s) - outsourcing , sunk costs , competition (biology) , business , affect (linguistics) , industrial organization , developing country , market competition , production (economics) , economics , international trade , market economy , marketing , microeconomics , economic growth , ecology , biology , linguistics , philosophy
. How does international competition affect overseas outsourcing? To address this question, this paper studies production decisions in the U.S.'s overseas assembly program (OAP). In this setting, a number of regularities emerge. First, prior participation is highly correlated with current participation, which suggests that sunk costs influence outsourcing choices. Second, increases in own‐country costs and declines in competitor‐country costs reduce participation probabilities. In addition, these persistence and cost effects are much larger for outsourcing in developing countries. Finally, outsourcing responses appear to reflect differences in 'market thickness,’ as cost sensitivity generally rises with competitor presence.