Proximity Strategies in Outsourcing Relations: The Role of Geographical, Cultural and Relational Proximity in the European Automotive Industry

46 Pages Posted: 10 Mar 2013

See all articles by Alexander Schmitt

Alexander Schmitt

KU Leuven; Flanders Research Foundation (FWO)

Johannes Van Biesebroeck

K.U.Leuven; Centre for Economic Policy Research (CEPR)

Date Written: February 22, 2013

Abstract

Trends towards international fragmentation of production and modular process technologies have increased the importance of proximity in the supply chain of sophisticated manufactured goods. Using a rich and novel data set for the European automotive industry, we simultaneously evaluate the relative importance of geographical, cultural and relational proximity in sourcing strategies. The estimates indicate that each dimension provides an independent benefit and also which measures have the largest relative importance. We also find that the positive effects attributed to some measures reflect past relationships rather than predict new ones. In particular, co-location and a low cultural distance should be interpreted as outcomes of a sourcing strategy, not as predictors for sourcing success. We investigate to what extent firms from different countries follow different strategies and which choices suppliers can make to boost their attractiveness as outsourcing partner.

Suggested Citation

Schmitt, Alexander and Van Biesebroeck, Johannes, Proximity Strategies in Outsourcing Relations: The Role of Geographical, Cultural and Relational Proximity in the European Automotive Industry (February 22, 2013). Available at SSRN: https://ssrn.com/abstract=2230332 or http://dx.doi.org/10.2139/ssrn.2230332

Alexander Schmitt (Contact Author)

KU Leuven ( email )

Naamsestraat 69
Leuven, B-3000
Belgium
+32-16373709 (Phone)
+32-16326796 (Fax)

HOME PAGE: http://www.econ.kuleuven.be/alexander.schmitt

Flanders Research Foundation (FWO) ( email )

Egmontstraat 5
Brussels, 1000
Belgium

Johannes Van Biesebroeck

K.U.Leuven ( email )

Naamsestraat 69
B-3000 Leuven
Belgium
+3216326793 (Phone)
+3216326796 (Fax)

HOME PAGE: http://www.econ.kuleuven.be/public/N07057/

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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