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Why do Firms Engage in Multi-sourcing?

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  • Justin Yifu Lin
  • Arijit Mukherjee
  • Yingyi Tsai

Abstract

We provide an explanation for multi-sourcing, which is often found in the real world and refers to the situation where a final goods producer acquires homogenous components from different suppliers. In the presence of imitation under outsourcing, multi-sourcing helps to deter entry by the suppliers into the final goods market and enhances profitability of the outsourcing firm.

Suggested Citation

  • Justin Yifu Lin & Arijit Mukherjee & Yingyi Tsai, 2008. "Why do Firms Engage in Multi-sourcing?," Discussion Papers 08/43, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:08/43
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Keywords

    Entry; Imitation; Multi-sourcing;
    All these keywords.

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