Strategic Dual Sourcing as a Driver for Free Revealing of Innovation

Matsushima, Noriaki; Zhao, Laixun

Institute of Social and Economic Research Discussion Papers, 2015, 936, 1-31

Number of Access:207（2025-07-24 04:41 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/51616

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Title
Strategic Dual Sourcing as a Driver for Free Revealing of Innovation
Creator
NRID
1000080334879 1000080334879
ORCID
0000-0002-7865-3875 0000-0002-7865-3875
researchmap permalink
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Scopus Author ID
7005645778 7005645778
CreatorName
Matsushima, Noriaki
NRID
1000070261394 1000070261394
CreatorName
Zhao, Laixun
Subject
Dual sourcing
Outside option
Spillover
Vertical relations
Abstract
This paper examines the role of dual sourcing (e.g., outside options) in vertical and horizontal relations. In a bilateral monopoly market, if either the upstream or downstream firm has outside options, the other firm could lose from seemingly positive shocks, e.g., market expansion or technology improvements. We extend this setting to a bilateral duopoly market in which each downstream firm has outside options and upstream firms can engage in cost reducing investments and generate technological spillovers. We find that each upstream firm has an incentive to voluntarily generate technological spillovers to its upstream rival if the downstream firms have better outside options.
Publisher
The Institute of Social and Economic Research, Osaka University
Source Title
Institute of Social and Economic Research Discussion Papers
Volume (Issue)
936
Page
1-31
Date of Issued
2015-05
Language
English
Handle URL
https://hdl.handle.net/11094/51616
Relation.references
URI
https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2015/DP0936.pdf
Access Rights
metadata only access
Category
ディスカッション／ワーキング・ペーパー DP/WP
Institute of Social and Economic Research Discussion Papers