Perceived Environmental Dynamism and Managerial Risk Aversion as Antecedents of Manufacturing Outsourcing: The Moderating Effects of Firm Maturity

This study investigates how perceived environmental dynamism and managerial risk aversion influence a firm's manufacturing outsourcing activities. Based on a survey of 86 small manufacturing firms, the study found that higher levels of perceived environmental dynamism and managerial risk aversion are associated with increased outsourcing activity. These relationships are moderated by firm maturity such that newer firms engage in more manufacturing outsourcing than their mature counterparts when the environment is perceived to be more dynamic. Mature firms were found to outsource more than newer firms when their top-management teams were relatively more risk averse.