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Identifier to cite or link to this item: https://hdl.handle.net/10086/17345

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Title
Asymmetric Information and Global Sourcing
Creator
Creator Name
Huang, Shin-Chen Huang, Shin-Chen
Affiliation
Affiliation Name
National Cheng-Chi University
Creator Name
Lu, Chia-Hui Lu, Chia-Hui
Affiliation
Affiliation Name
City University of Hong Kong
Editor
Contributor Name
社会科学の高度統計・実証分析拠点構築 = Research Unit for Statistical and Empirical Analysis in Social Sciences
Key Word
Asymmetric Information
Global Sourcing
Foreign Direct Investment
Joint Venture
Outsourcing
JEL
F21
F23
Abstract
This paper aims to study the choice of offshoring modes made by multinationals in the presence of asymmetric information. We focus on two types of asymmetric information, namely hidden characteristics and hidden action. The former creates adverse selection problem, and the later leads to moral hazard problem, both of which incur non-trivial costs to multinationals. We show that different offshoring modes, including greenfield foreign direct investment, joint venture, and outsourcing, can serve as a means to overcome or mitigate the problem of information asymmetry. We study the conditions under which one particular type of offshore modes dominates the others. The model generates implications consistent with the patterns of the prevalence of various offshoring models over time, and across industries and countries.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2009-04
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Global COE Hi-Stat Discussion Paper Series ; No. 67
Relation
Related Identifier
URI
  http://gcoe.ier.hit-u.ac.jp/english/index.html
Number of Pages
22
Sponsorship
グローバルCOEプログラム = Global COE Program
Appears in Collections
Global COE Hi-Stat Discussion Paper Series
URL
https://hdl.handle.net/10086/17345