Domestic sourcing by foreign-owned subsidiaries

Williams, David, Tuselmann, Heinz and McDonald, Frank (2008) Domestic sourcing by foreign-owned subsidiaries. Environment and planning C government and policy, 26 (3). pp. 260-276. ISSN 1472-3425

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Abstract

This paper investigates the development of domestic sourcing by foreign-owned subsidiaries (FOS) in the UK. The regional development and international-business literatures are used to develop a conceptual framework on the links between autonomy, the use of networks, and domestic sourcing. Data from a survey of German, French, and US FOS in the UK is used to test the model. The results indicate that increased use of networks and increased operational decision-making autonomy are associated with increased domestic sourcing, but that only a minority of FOS are increasing their use of domestic sourcing. The growing importance of global sourcing is considered as a possible explanation for the low proportion of FOS that are increasing their use of domestic sourcing. The implications for regional-development policy of the findings are also assessed.