Economic explanations for concurrent sourcing

Concurrent sourcing is a phenomenon where firms simultaneously make and buy the same good, i.e. they simultaneously use the governance modes of market and hierarchy. Though concurrent sourcing seems to be widespread, few studies of sourcing have focused on this phenomenon. This paper reviews different economic explanations for why firms use concurrent sourcing. The distinctive features of the explanations are compared, and it is discussed how they may serve as a springboard for research on concurrent sourcing. Managerial implications are also offered.