Outsourcing and its implications for market success : negative curvilinearity, firm resources, and competition
Kotabe, Masaaki, Mol, Michael J., Murray, Janet Y. and Parente, Ronaldo. (2012) Outsourcing and its implications for market success : negative curvilinearity, firm resources, and competition. Academy of Marketing Science. Journal, Vol.40 (No.2). pp. 329-346. ISSN 0092-0703
WRAP_Mol_270611-outsourcing_and_its_implications_for_market_success_revision_-_june_13_2011.pdf - Accepted Version
Official URL: http://www.springerlink.com/content/u8268v804m1l97...
Over the past few decades, outsourcing has become a widely discussed and researched means for firms to change their performance. In this article, we attempt to link outsourcing to the market success of firms, specifically their market share. We argue that although firms may be able to increase their market share through outsourcing, this is only true up to a point, beyond which market share actually decreases as a consequence of further outsourcing. There is, in other words, a negatively curvilinear (inverted U) relationship between outsourcing and market share. We also hypothesize that the outsourcing–market share relationship is moderated negatively by both the strength of firm resources and the extent of competition in a firm‘s market. We empirically confirm these arguments through a panel data analysis containing over 19,000 observations on manufacturing firms, and offer some case examples to illustrate the mechanisms driving these results. We discuss implications for marketing research and practice.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HD Industries. Land use. Labor|
|Divisions:||Faculty of Social Sciences > Warwick Business School > Marketing & Strategic Management
Faculty of Social Sciences > Warwick Business School
|Library of Congress Subject Headings (LCSH):||Contracting out, Market share|
|Journal or Publication Title:||Academy of Marketing Science. Journal|
|Publisher:||Springer New York LLC|
|Official Date:||March 2012|
|Number of Pages:||18|
|Page Range:||pp. 329-346|
|Access rights to Published version:||Restricted or Subscription Access|
Aaker, D. (1996). Building strong brands. New York: The Free Press.
Kotabe, M., & Mol, M. J. (2004). A new perspective on outsourcing and the performance of the firm. In: M. Trick (ed.), Global Corporate Evolution: Looking Inward or Looking Outward (pp. 331-340). International Management Series: Volume 4. Pittsburgh: Carnegie Mellon University Press.
Murray, J. Y., Kotabe, M., & Zhou, J. N. (2005). Strategic alliance-based sourcing and market performance: Evidence from foreign firms operating in China. Journal of International Business Studies, 36, 187-208.
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