Why Do Firms Engage in Multi-Sourcing?
University of Nottingham - School of Economics
National University of Kaohsiung
Justin Yifu Lin
affiliation not provided to SSRN
November 23, 2008
University of Nottingham, GEP Research Paper 2008/43
We provide an explanation for multi-sourcing, which is often found in the real world and refers to the situation where a final goods producer acquires homogenous components from different suppliers. In the presence of imitation under outsourcing, multi-sourcing helps to deter entry by the suppliers into the final goods market and enhances profitability of the outsourcing firm.
Number of Pages in PDF File: 14
Keywords: entry, imitation, multi-sourcing
JEL Classification: F12, F23, L13, L24working papers series
Date posted: July 25, 2009
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