This paper analyzes the impact of logistics and manufacturing outsourcing announcements on shareholder wealth. We assess this impact by measuring the abnormal return (which is the part of the return of a stock not related to market or industry wide movements) of 181 announcements from 1992 to 2003. We find that manufacturing outsourcing announcements increase the contract granting firm stock price by .4% and that logistics outsourcing announcements decrease the stock return by .6%. We also conducted a 60 day post announcement analysis and concluded that this is a transient effect. To gain further insight we preformed regression analysis with variables such as debt-to-equity ratio, market-to-book ratio, firm size, growth prospect and time of the outsourcing deal. None of the regressions were statistically significant. We then conducted sensitivity analysis on factors such as industry competitiveness, capital, research and development intensity and use of multiple outsourcing firms to validate our previous findings. Only one regression showed statistically significant results: manufacturing outsourcing for the retail and wholesale industry with value of -.05. Our findings suggest that shareholders value manufacturing outsourcing deals and penalize logistics outsourcing deals, but only in the short run.
| Identifer | oai:union.ndltd.org:VANDERBILT/oai:VANDERBILTETD:etd-12072005-133135 |
| Date | 20 December 2005 |
| Creators | Tapia de Miguel, Pedro |
| Contributors | Robert W. Blanning, David M. Dilts |
| Publisher | VANDERBILT |
| Source Sets | Vanderbilt University Theses |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.library.vanderbilt.edu/available/etd-12072005-133135/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached hereto a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to Vanderbilt University or its agents the non-exclusive license to archive and make accessible, under the conditions specified below, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
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