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Global Sourcing

Author

Listed:
  • Mol, M.J.
  • van Tulder, R.
  • Beije, P.R.

Abstract

Since the early 1990s international - or even global - outsourcing of intermediate products from suppliers has been propagated as a key means to improve the performance of firms. It is argued that becoming more lean and internationally focused is beneficial for the buyer as well as for the supplier . Global sourcing is currently believed to be a common phenomenon. Drawing upon a recent survey among a representative sample of 200 large Dutch manufacturing firms this paper gives an answer to the question to what extent internationalization of sourcing is indeed taking place and whether it affects a firm's performance. The analysis reveals that for this sample of firms global sourcing is the exception rather than the rule. Although firms undertake considerable international outsourcing, this is mostly limited to nearby ( European Union) countries. Statistical tests reveal that there is no significant relation between international outsourcing and either market or financial performance. International outsourcing can not be used to adequately explain firm performance. Therefore, an alternative approach is discussed, in which the degree of (international) outsourcing is contingent upon factors like the size and location of the headquarters of the firm.

Suggested Citation

  • Mol, M.J. & van Tulder, R. & Beije, P.R., 2002. "Global Sourcing," ERIM Report Series Research in Management ERS-2002-55-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:210
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    File URL: https://repub.eur.nl/pub/210/erimrs20020701145256.pdf
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    References listed on IDEAS

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    1. Janet Y Murray & Masaaki Kotabe & Albert R Wildt, 1995. "Strategic and Financial Performance Implications of Global Sourcing Strategy: A Contingency Analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(1), pages 181-202, March.
    2. 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.
    3. Sanjaya Lall, 1980. "The Pattern of Intra-Firm Exports by US Multinationals," Palgrave Macmillan Books, in: The Multinational Corporation, chapter 4, pages 93-109, Palgrave Macmillan.
    4. Peter J Buckley & R D Pearce, 1979. "Overseas Production and Exporting by the World's Largest Enterprises: A Study in Sourcing Policy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 10(1), pages 9-20, March.
    5. Subramanian Rangan, 2000. "Search and Deliberation in International Exchange: Microfoundations to Some Macro Patterns," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(2), pages 205-222, June.
    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. Vernon, Raymond, 1979. "The Product Cycle Hypothesis in a New International Environment," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 41(4), pages 255-267, November.
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    Cited by:

    1. Mol, Michael J. & Pauwels, Pieter & Matthyssens, Paul & Quintens, Lieven, 2004. "A technological contingency perspective on the depth and scope of international outsourcing," Journal of International Management, Elsevier, vol. 10(2), pages 287-305.

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    More about this item

    Keywords

    MNCs; global sourcing; performance; regionalization; sourcing strategy;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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