The market valuation of outsourcing new product development

N. Raassens, S. Wuyts, I. Geyskens

Research output: Contribution to journalArticleAcademicpeer-review

19 Citations (Scopus)

Abstract

Firms are increasingly outsourcing new product development (NPD), yet little is known about the financial performance implications of this decision. An empirical test shows that there is considerable variation in the performance implications of NPD outsourcing. The authors develop a contingency framework to explain when taking a minority equity participation in the outsourcing provider versus selecting a provider to whom the outsourcing firm has outsourced NPD in the past (i.e., prior tie selection) may increase the outsourcing firm's performance. They find that the superior governance mechanism depends on two forms of uncertainty: technological uncertainty and cultural uncertainty.

Original languageEnglish
Pages (from-to)682-695
Number of pages14
JournalJournal of Marketing Research
Volume49
Issue number5
DOIs
Publication statusPublished - Oct 2012

Keywords

  • outsourcing
  • new product development
  • governance
  • technological uncertainty
  • cultural uncertainty
  • event study
  • BUYER-SUPPLIER RELATIONSHIPS
  • STRATEGIC ALLIANCES
  • MULTINATIONAL-ENTERPRISES
  • INTERFIRM RELATIONSHIPS
  • GOVERNANCE MECHANISMS
  • PARTNER SELECTION
  • NATIONAL CULTURE
  • EQUITY OWNERSHIP
  • JOINT VENTURES
  • PERFORMANCE

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