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Determinants of intra-firm sourcing and market performance

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  • Kotabe, Masaaki
  • Murray, Janet Y.

Abstract

Earlier studies have shown that internal sourcing of major components has a direct bearing on the multinational firm's market performance. However, factors that affect the extent to which the firm employs intra-firm (internal) sourcing have not been explored. In this study, we examine the determinants of internal sourcing of major components, and revisit the relationship between internal sourcing of major components and market performance. Our results show that process innovation, asset specificity, management's attitude, nationality, and availability of substitute components strongly affect the degree of internal sourcing of major components that subsequently has a bearing on a product's market performance.

Suggested Citation

  • Kotabe, Masaaki & Murray, Janet Y., 1996. "Determinants of intra-firm sourcing and market performance," International Business Review, Elsevier, vol. 5(2), pages 121-135, April.
  • Handle: RePEc:eee:iburev:v:5:y:1996:i:2:p:121-135
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    References listed on IDEAS

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    1. Masaaki Kotabe & Janet Y Murray, 1990. "Linking Product and Process Innovations and Modes of International Sourcing in Global Competition: A Case of Foreign Multinational Firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 21(3), pages 383-408, September.
    2. Jane Sneddon Little, 1986. "Intra-firm trade and U.S. protectionism: thoughts based on a small survey," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 42-51.
    3. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
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    5. Paul M Swamidass, 1993. "Import Sourcing Dynamics: An Integrative Perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(4), pages 671-691, December.
    6. Paul M Swamidass & Masaaki Kotabe, 1993. "Component Sourcing Strategies of Multinationals: An Empirical Study of European and Japanese Multinationals," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(1), pages 81-99, March.
    7. Masaaki Kotabe & Glenn S Omura, 1989. "Sourcing Strategies of European and Japanese Multinationals: A Comparison," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 20(1), pages 113-130, March.
    8. Jane Sneddon Little, 1987. "Intra-firm trade: an update," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 46-51.
    9. Masaaki Kotabe & K Scott Swan, 1994. "Offshore Sourcing: Reaction, Maturation, and Consolidation of U.S. Multinationals," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(1), pages 115-140, March.
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    11. Lall, Sanjaya, 1978. "The Pattern of Intra-Firm Exports by U.S. Multinationals," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 40(3), pages 209-222, August.
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    13. J Michael Geringer, 1991. "Strategic Determinants of Partner Selection Criteria in International Joint Ventures," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(1), pages 41-62, March.
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    17. Cavusgil, S. Tamer & Yaprak, Attila & Yeoh, Poh-Lin, 1993. "A decision-making framework for global sourcing," International Business Review, Elsevier, vol. 2(2), pages 143-156.
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    Cited by:

    1. Gleich, Wolfgang & Schmeisser, Bjoern & Zschoche, Miriam, 2017. "The influence of competition on international sourcing strategies in the service sector," International Business Review, Elsevier, vol. 26(2), pages 279-287.
    2. Valle, Sandra & García, Francisco & Avella, Lucía, 2015. "Offshoring Intermediate Manufacturing: Boost or Hindrance to Firm Innovation?," Journal of International Management, Elsevier, vol. 21(2), pages 117-134.

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