Complementarities between Outsourcing and Foreign Sourcing

  title={Complementarities between Outsourcing and Foreign Sourcing},
  author={Gene M. Grossman},
We examine the strategies of …rms that face an array of organizational choices. Each …rm must acquire intermediate inputs and assemble …nal products. It can perform these activities internally or externally, and at home or abroad. We study the relative prevalence of various organizational structures in industries that di¤er in …xed organizational costs when …rms in each industry di¤er in their productivity levels. We identify conditions under which outsourcing and foreign sourcing are… CONTINUE READING
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