The Decentralization of American Manufacturing
This chapter describes the changing structure of American durable manufacturing and the ensuing importance of the interfirm relationship. It argues that the decentralization of production has created space for innovation and gains for collaboration even at the middle level of small- and medium-sized component suppliers, and that their creation requires that the parties cede some exit options. As OEMs and suppliers navigate uncertainties that follow from the devolution of innovation responsibilities, they hedge relationships at multiple levels, defying the predictions of the segmentation hypothesis.
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