Chapter 5: Economic analysis of international supply chains: An internalization perspective
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Offshoring and outsourcing in global value chains have been extensively analysed from a strategic management perspective. This chapter examines these issues from an internalization theory perspective by summarizing the contribution of internalization theory to supply chain analysis; considering how a division of labour is coordinated and comparing coordination by management with coordination by the market; and discussing the formal models of supply chains developed by economists. Supply chain researchers possessing an interest in economic principles and good mathematical skills can make an important contribution to internalization theory, and it is hoped that this chapter will encourage them to do so.

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