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Foreign direct investments, international outsourcing and subcontracting: The underlying logics
[Investissements directs étrangers, externalisation et sous-traitance internationales: Les logiques sous-jacentes]

Author

Listed:
  • Riad Haddadi

    (UB - Université Abderrahmane Mira [Université de Béjaïa] = University Abderrahmane Mira [University of Béjaïa])

  • Slimane Merzoug

    (UB - Université Abderrahmane Mira [Université de Béjaïa] = University Abderrahmane Mira [University of Béjaïa])

Abstract

In this paper, we put into perspective international outsourcing and subcontracting, as alternative strategies of firm internationalization. We also identify the trade-offs that allow the firm to choose between integration or outsourcing. Our main results show that if asset ownership is separable without the risk of losing its competitive advantage, the firm should opt for outsourcing through international subcontracting, provided that the transaction costs are lower than the control costs of a foreign subsidiary.

Suggested Citation

  • Riad Haddadi & Slimane Merzoug, 2021. "Foreign direct investments, international outsourcing and subcontracting: The underlying logics [Investissements directs étrangers, externalisation et sous-traitance internationales: Les logiques s," Post-Print hal-03505960, HAL.
    • Handle: RePEc:hal:journl:hal-03505960
    Note: View the original document on HAL open archive server: https://auf.hal.science/hal-03505960
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    More about this item

    Keywords

    Investissement direct étranger; Externalisation; Sous-traitance; Fragmentation de la production L23; F23 Foreign direct investment; Outsourcing; Subcontracting; Production fragmentation. JEL Classification Codes: L23; F23 Investissements directs étrangers; externalisation et sous-traitance internationales: Les logiques sous-jacentes;
    All these keywords.

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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