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The curvilinear effect of manufacturing outsourcing and captive-offshoring on firms' innovation: The role of temporal endurance

Published on May 1, 2019in International Journal of Production Economics5.00
· DOI :10.1016/j.ijpe.2019.02.010
Erica Mazzola7
Estimated H-index: 7
(University of Palermo),
Manfredi Bruccoleri15
Estimated H-index: 15
(University of Palermo),
Giovanni Perrone16
Estimated H-index: 16
(University of Palermo)
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Abstract
Abstract This paper aims to contribute to the open debate in the literature on the effect of global sourcing strategies on firm performance by studying the consequences of manufacturing outsourcing and captive-offshoring for the innovation capability of the firm. We grounded our hypotheses based on the outsourcing and offshoring literature and by narrowing our focus to the effects of persisting in their adoption over time. We tested our hypotheses using data from a sample of 368 manufacturing companies listed on NASDAQ stock market. The paper provides theoretical explanations and empirical findings for the inverted U-shaped influence of keeping doing captive-offshoring on new product development performance, in contrast to outsourcing, which shows a negative linear relationship. The conclusion is that managers should be aware of the consequences of outsourcing and captive-offshoring manufacturing, either in a spot manner or over a long period. They should eventually search for equilibrium between adopting captive-offshoring for too few years vs. too many years, by monitoring year by year its effects to avoid adaptation processes and corporation hollowing, and evaluate the opportunity to re-shore manufacturing.
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References105
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#1Philip J. Steinberg (University of Wuppertal)H-Index: 1
#2Vivien Procher (University of Wuppertal)H-Index: 8
Last.Diemo Urbig (IU: Indiana University Bloomington)H-Index: 12
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#1Erica Mazzola (University of Palermo)H-Index: 7
#2Manfredi Bruccoleri (University of Palermo)H-Index: 15
Last.Giovanni Perrone (University of Palermo)H-Index: 16
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#1Alessandro Ancarani (University of Catania)H-Index: 13
#2Carmela DiMauro (University of Catania)H-Index: 11
Last.Marco Sartor (University of Udine)H-Index: 14
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#1Sandra Valle (University of Oviedo)H-Index: 4
#2Francisco José Álvarez García (University of Oviedo)H-Index: 4
Last.Lucía Avella (University of Oviedo)H-Index: 10
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#1Bernhard Dachs (Austrian Institute of Technology)H-Index: 11
#2Bernd EbersbergerH-Index: 17
Last.Oliver Som (Fraunhofer Society)H-Index: 4
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#1Vito Amendolagine (University of Bari)H-Index: 4
#2Rosa Capolupo (University of Bari)H-Index: 4
Last.Giovanni Maria Ferri (Sapienza University of Rome)H-Index: 10
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#1Francesca Riccobono (University of Palermo)H-Index: 4
#2Manfredi Bruccoleri (University of Palermo)H-Index: 15
Last.Giovanni Perrone (University of Palermo)H-Index: 16
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