Firm-asymmetry and strategic outsourcing
In contrast to the conventional wisdom, we show that a final goods producer may outsource input production to an outside supplier even if the final goods producer possesses a superior input-production technology compared to the outside supplier. Such an outsourcing may reduce consumer surplus and so...
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| Format: | Article |
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Elsevier
2017
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| Online Access: | https://eprints.nottingham.ac.uk/47200/ |
| _version_ | 1848797488111157248 |
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| author | Cao, Jiyun Mukherjee, Arijit Sinha, Uday Bhanu |
| author_facet | Cao, Jiyun Mukherjee, Arijit Sinha, Uday Bhanu |
| author_sort | Cao, Jiyun |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | In contrast to the conventional wisdom, we show that a final goods producer may outsource input production to an outside supplier even if the final goods producer possesses a superior input-production technology compared to the outside supplier. Such an outsourcing may reduce consumer surplus and social welfare. We also show that, in the presence of outsourcing, innovation by the firm doing outsourcing to reduce the cost of in-house input production and to reduce the input coefficient in the final goods production may have significantly different implications for the consumers and the society. |
| first_indexed | 2025-11-14T20:04:40Z |
| format | Article |
| id | nottingham-47200 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T20:04:40Z |
| publishDate | 2017 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-472002020-05-04T19:12:53Z https://eprints.nottingham.ac.uk/47200/ Firm-asymmetry and strategic outsourcing Cao, Jiyun Mukherjee, Arijit Sinha, Uday Bhanu In contrast to the conventional wisdom, we show that a final goods producer may outsource input production to an outside supplier even if the final goods producer possesses a superior input-production technology compared to the outside supplier. Such an outsourcing may reduce consumer surplus and social welfare. We also show that, in the presence of outsourcing, innovation by the firm doing outsourcing to reduce the cost of in-house input production and to reduce the input coefficient in the final goods production may have significantly different implications for the consumers and the society. Elsevier 2017-10-16 Article PeerReviewed Cao, Jiyun, Mukherjee, Arijit and Sinha, Uday Bhanu (2017) Firm-asymmetry and strategic outsourcing. International Review of Economics and Finance, 53 . pp. 16-24. ISSN 1059-0560 Outsourcing; Consumer surplus; Welfare http://www.sciencedirect.com/science/article/pii/S105905601630274X doi:10.1016/j.iref.2017.10.008 doi:10.1016/j.iref.2017.10.008 |
| spellingShingle | Outsourcing; Consumer surplus; Welfare Cao, Jiyun Mukherjee, Arijit Sinha, Uday Bhanu Firm-asymmetry and strategic outsourcing |
| title | Firm-asymmetry and strategic outsourcing |
| title_full | Firm-asymmetry and strategic outsourcing |
| title_fullStr | Firm-asymmetry and strategic outsourcing |
| title_full_unstemmed | Firm-asymmetry and strategic outsourcing |
| title_short | Firm-asymmetry and strategic outsourcing |
| title_sort | firm-asymmetry and strategic outsourcing |
| topic | Outsourcing; Consumer surplus; Welfare |
| url | https://eprints.nottingham.ac.uk/47200/ https://eprints.nottingham.ac.uk/47200/ https://eprints.nottingham.ac.uk/47200/ |