Make Or Buy: The Research On Manufacturing Enterprises Demand On Producer Services

Chinese manufacturing scale has expanded largely, with the fast development ofmanufacturing value added, since the reform and open policy. Manufacturing industry madegreat contributions to the steady rapid growth of china’s economy and played an important rolein the national economy. But the high growth rate of Chinese manufacturing was at the cost ofhigh energy-consuming, causing pollution to environment with low quality and added value.Under the circumstances of energy crisis and human high attentions to environment, the chiefproblem of the manufacturing industry is transformation and updating. According to thedevelopment of the developed country, the transformation and updating of manufacturingindustry needs the support from modern producer services. What shall producer services dobetter to support manufacturing industry transformation and updating? Demanding for theproducer services is determined by the characteristics of manufacturing enterprises. If the serviceenterprises want to predict the scale and structure of producer services demands and establish theservice strategies, they should know the characteristics of manufacturing enterprises.Based on the transaction cost theories, Resource Based View and the view of supply anddemand, the paper analyzes the relationship between the characteristics of manufacturingenterprises and its make-or-buy behavior of producer services. Then use the multiple logisticregression method to calculate and study the effect of the different characteristics ofmanufacturing enterprises on demanding to producer services. Research shows that there aremany factors impacting the manufacturing enterprises’ demand for the producer services,including scope of activities, ownership, scale, production pattern and the intensity of factor. Onthe decision of make-or-buy, manufacturing enterprises with wide scope of activities,foreign-funded enterprise, small-scale and customization production and capital-intensiveenterprises tend to buy the producer services from the outsiders. However, manufacturingenterprises in the little scope of activities, small scale, private-owned and mass productioncharacteristics are unstable demand for producer services, with the result that they demand lowintensity on producer service.