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Supplier switching and outsourcing

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  • Yukako Ono
  • Victor Stango

Abstract

We examine supplier switching decisions using a unique database that tracks firms (credit unions) and their suppliers (data processing vendors); the data are in a panel, allowing us to track supplier switching decisions at a new level of detail. We focus on two sets of relationships. First, we estimate a model that relates supplier choices and switching to a variety of buyer- and supplier-specific characteristics. Second, we examine how> switching depends on the vendor relationships that credit unions choose: one is a partial form of outsourcing while the other is more complete. This allows us to estimate how supplier switching interacts with organizational form.

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File URL: http://www.chicagofed.org/digital_assets/publications/working_papers/2005/wp2005_22.pdf
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Bibliographic Info

Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-05-22.

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Date of creation: 2005
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Handle: RePEc:fip:fedhwp:wp-05-22

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Related research

Keywords: Credit unions ; Contracting out;

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References

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  1. Keane, Michael P, 1997. "Modeling Heterogeneity and State Dependence in Consumer Choice Behavior," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(3), pages 310-27, July.
  2. Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," CEPR Discussion Papers 5798, C.E.P.R. Discussion Papers.
  3. Mark Israel, 2005. "Tenure Dependence in Consumer-Firm Relationships: An Empirical Analysis of Consumer Departures from Automobile Insurance Firms," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 165-192, Spring.
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Cited by:
  1. Horgos, Daniel, 2007. "Labor Market Effects of International Outsourcing: How Measurement Matters," Working Paper 62/2007, Helmut Schmidt University, Hamburg.

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