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

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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.
Lingua originaleEnglish
pagine (da-a)197-210
Numero di pagine14
RivistaDefault journal
Volume211
Stato di pubblicazionePublished - 2019

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

Cita questo

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title = "The curvilinear effect of manufacturing outsourcing and captive-offshoring on firms' innovation: The role of temporal endurance",
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.",
keywords = "Captive-offshoring; External knowledge acquisition; New product development; Outsourcing; Temporal endurance; Business, Management and Accounting (all); Economics and Econometrics; Management Science and Operations Research; Industrial and Manufacturing Engineering",
author = "Manfredi Bruccoleri and Giovanni Perrone and Erica Mazzola",
year = "2019",
language = "English",
volume = "211",
pages = "197--210",
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T1 - The curvilinear effect of manufacturing outsourcing and captive-offshoring on firms' innovation: The role of temporal endurance

AU - Bruccoleri, Manfredi

AU - Perrone, Giovanni

AU - Mazzola, Erica

PY - 2019

Y1 - 2019

N2 - 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.

AB - 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.

KW - Captive-offshoring; External knowledge acquisition; New product development; Outsourcing; Temporal endurance; Business

KW - Management and Accounting (all); Economics and Econometrics; Management Science and Operations Research; Industrial and Manufacturing Engineering

UR - http://hdl.handle.net/10447/342968

M3 - Article

VL - 211

SP - 197

EP - 210

JO - Default journal

JF - Default journal

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