The Optimal Degree of Outsourcing
نویسندگان
چکیده
This paper develops an economic model to determine the optimal degree of outsourcing by a firm and explain conditions for complete, partial, or no outsourcing decisions. It is found that for outsourcing to be profitable, it is not necessary, although sufficient, that a vendor be more efficient than the original producer. Moreover, corporate downsizing and outsourcing appear to be complementary strategies.
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