The Role of Resources and Capabilities in Global Sourcing: An Empirical Study Using Structural Equation Modeling

This study empirically investigates how firm-specific capabilities and resources acquired through global sourcing activities affect process performance. The underlying research model was based on the resource- and capability-based view of the firm. In order to test the model, an empirical study was conducted through structured telephone interviews with Chief Procurement Officers and Purchasing Managers of 200 large-sized companies in five European countries. The results showed that process performance was strongly influenced by the level of external resources in control, which in turn were very strongly related to the extent of global sourcing capabilities of the firm. The overall conclusion is that global sourcing capabilities help firms getting access to a larger resource pool, which in turn affects performance in terms of effectiveness and efficiency positively.