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https://hdl.handle.net/2440/88125
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Type: | Journal article |
Title: | Captive offshoring of new product development in Brazil: how does arbitrage influence local, collaborative relationships? |
Author: | Boehe, D. |
Citation: | Management International Review, 2010; 50(6):747-773 |
Publisher: | Springer Verlag |
Issue Date: | 2010 |
ISSN: | 0938-8249 1861-8901 |
Statement of Responsibility: | Dirk M. Boehe |
Abstract: | This paper focuses on captive offshoring of new product development (NPD), i.e., relocating projects or project phases to foreign-based, wholly-owned, multinational corporation (MNC) subsidiaries (captive offshore units) to benefit from cost and efficiency advantages and/or from access to complementary technological resources and capabilities. Adopting a host country perspective, we theorize why different forms of local collaboration may complement or conflict with efficiency-seeking or arbitrage strategies and may thus influence why captive offshore units receive new product development orders from other MNC units located abroad. Using a sample from Brazil and applying structural equation modeling with partial least squares (PLS), we find that local NPD outsourcing constitutes a complementary relationship, while local cooperation with clients creates a trade-off relationship with captive offshoring. That these relationships are moderated by the captive offshore unit’s cost position within the MNC suggests that arbitrage effects transcend the headquarter-subsidiary relationship into the sphere of MNC subsidiaries’ local collaborations. Our findings imply that arbitrage in multinational contexts affects the interdependence between resources and transaction costs. |
Keywords: | Multinational corporations; Subsidiaries; Emerging economies; Offshoring; Outsourcing; Arbitrage; Brazil |
Rights: | © Gabler Verlag 2010 |
DOI: | 10.1007/s11575-010-0054-z |
Published version: | http://dx.doi.org/10.1007/s11575-010-0054-z |
Appears in Collections: | Aurora harvest 7 Business School publications |
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