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Title page for ETD etd-12072005-133135

Type of Document Master's Thesis
Author Tapia de Miguel, Pedro
Author's Email Address pedro.tapia.de.miguel@vanderbilt.edu
URN etd-12072005-133135
Title The impact of logistics and manufacturing on shareholder wealth
Degree Master of Science
Department Management of Technology
Advisory Committee
Advisor Name Title
David M. Dilts Committee Chair
Robert W. Blanning Committee Member
  • logistics outsourcing
  • manufacturing outsourcing
  • event study
Date of Defense 2005-12-12
Availability unrestricted
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.
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