Emerging Tech

External Resource Sourcing: Does Experience Help Firms Select Governance Modes?

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Executive Summary

This paper explores whether firms make better governance choices as they gain experience in different modes of governing external resource sourcing, modes that include acquisitions, alliances, and purchase contracts. This paper refers to the ability to choose appropriate governance modes as a firm's mode selection capability. This paper suggests that a firm's acquisition mode selection capability mediates the relationship between experience and performance of external governance modes. This research has implications for the learning literature in that it stresses the benefits of accumulating heterogeneous experience for a firm's ability to select an appropriate mode of external sourcing choices.

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