Small firms are more likely to outsource production

Reference no: EM13859888

In many modern U.S. industries the following relationships seem to be predominant:

What factors might explain these patterns?

Small firms are more likely to outsource production of inputs than are large firms;

Standard inputs (such as a simple transistor that can be used by several electronics manufacturers) are more likely to be outsourced than "tailor-made" inputs (such as a circuit board designed for a single manufacturer's specific needs).

Reference no: EM13859888

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