From Flexibility to Insecurity: How Outsourcing Amplifies Firm Level Uncertainty

Détails

ID Serval
serval:BIB_0FC2341D8534
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Titre
From Flexibility to Insecurity: How Outsourcing Amplifies Firm Level Uncertainty
Périodique
Journal of the European Economic Association
Auteur⸱e⸱s
Thesmar  D., Thoenig  M.
ISSN
1542-4766
Statut éditorial
Publié
Date de publication
12/2007
Peer-reviewed
Oui
Volume
5
Numéro
6
Pages
1161-1202
Langue
anglais
Résumé
This article presents a model where firms may endogenously externalize part of their production process. We start from the premise that adaptation to uncertainty cannot be contracted upon in the worker/employer relationship. Vertical separation then balances flexibility gains against hold-up costs of opportunistic behavior by outside contractors. In equilibrium, the degree of separation is shown to depend on the degree of product market competition, contractor's bargaining power, and the volatility of demand shocks. Our main result is that an increase in the degree of vertical separation amplifies the elasticity to demand shocks of firms' sales and employment. It does not, however, amplify aggregate uncertainty. Evidence from firm-level data is shown to be largely consistent with the main implications of our theory.
Création de la notice
28/08/2009 12:53
Dernière modification de la notice
20/08/2019 12:36
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