Does Ownership affect the Variability of the Production Process? Evidence from International Courier Services
Abstract
While transaction-cost economics has considered the effect of make-or-buy decisions on expected product performance, research has not explored the effect of make-or-buy decisions on variability of product performance (i.e., reliability). We argue that firms that differentiate their products by pursuing low variability face exchange attributes for which outsourcing the corresponding performs worse than vertical integration. Nonparametric density estimation and parametric tests of variance from Japanese International Courier and Small Packages services industry data provide general support for our hypothesis.
Recommended Citation
Hsieh, C., Lazzarini, S. G., Nickerson, J. A., & Laurini, M. (2007). Does Ownership affect the Variability of the Production Process? Evidence from International Courier Services. Organization Science Institute for Operations Research and the Management Sciences (INFORMS).
The definitive version is available at https://doi.org/10.2139/ssrn.309622
Department(s)
Business and Information Technology
Keywords and Phrases
Contracting; Organizational Choice; Ownership; Reliability; Vertical integration
International Standard Serial Number (ISSN)
1047-7039
Document Type
Article - Journal
Document Version
Citation
File Type
text
Language(s)
English
Rights
© 2007 Institute for Operations Research and the Management Sciences (INFORMS), All rights reserved.
Publication Date
01 Jan 2007
