‘Make-or-Buy’ in International Oligopoly and the Role of Competitive Pressure

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‘Make-or-Buy’ in International Oligopoly and the Role of Competitive Pressure

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Dermot, Leahy
Catia , Montagna

Additional information is available for the following registered author(s):

Catia Montagna

Abstract

We study how competitive pressure influences the make-or-buy decision that oligopolistic firms face between producing an intermediate component in-house or purchasing it from a domestic supplier. We model outsourcing as a bilateral relationship in which the supplier undertakes relationship specific investments. A home and foreign firm compete in the home market. Firms’ mode of operation decision depends on cost and strategic considerations. Competitive pressure increases firms’ incentive to outsource. Consumer gains from trade liberalisation are enhanced when it leads to less outsourcing.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 7468.

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Date of creation: 2007
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Handle: RePEc:pra:mprapa:7468

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Paper
- Dermot Leahy & Catia Montagna, 2006. "'Make-or-Buy' in International Oligopoly and the Role of Competitive Pressure," Discussion Papers 197, University of Dundee, Economic Studies. [Downloadable!]
- Dermot Leahy & Catia Montagna, . "Make-Or-Buy’ In International Oligopoly And The Role Of Competitive Pressure," Economics, Finance and Accounting Department Working Paper Series n1901107.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth. [Downloadable!]
- Dermot Leahy, & Catia Montagna, . "‘Make-or-Buy' in International Oligopoly and the Role of Competitive Pressure," Discussion Papers 07/05, University of Nottingham, GEP. [Downloadable!]

Find related papers by JEL classification:
L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
F2 - International Economics - - International Factor Movements and International Business
F1 - International Economics - - Trade
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

This paper has been announced in the following NEP Reports:

NEP-ALL-2008-03-08 (All new papers)
NEP-BEC-2008-03-08 (Business Economics)
NEP-COM-2008-03-08 (Industrial Competition)
NEP-CSE-2008-03-08 (Economics of Strategic Management)
NEP-IND-2008-03-08 (Industrial Organization)
NEP-INT-2008-03-08 (International Trade)
NEP-MIC-2008-03-08 (Microeconomics)

References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Dermot Leahy & Catia Montagna, 2008. "Outsourcing Versus Fdi In Oligopoly Equilibrium," Discussion Papers 215, University of Dundee, Economic Studies. [Downloadable!]

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