This study investigates how supply chain sourcing strategies are associated with product quality recalls. In particular, the research examines how make‐or‐buy decisions (i.e., outsourcing), the use of foreign suppliers (i.e., offshore outsourcing), the relocation of production to offshore markets (i.e., offshoring), and decisions to consolidate supply bases (i.e., the use of few vs. myriad suppliers) are related to product recalls. Product recalls are serious quality failures in supply chains with significant, negative impacts on firm performance. Product recalls are frequently connected to the globalization of supply chains. Globalization has, at times, promoted inconsistency in quality control and standards, leading to quality problems and failures. Data across multiple industries, with widely reported recalls, have been collected and analyzed using regression techniques. Our findings indicate that offshore outsourcing has a greater impact on recalls than offshoring without outsourcing; outsourcing domestically has the least influence. Outsourcing to a smaller supplier base may lead to fewer recalls at low levels of outsourcing. However, it may exacerbate the impact of outsourcing on recalls at high levels of outsourcing.

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Firms are increasingly sourcing innovation from their supply chain partners. Meanwhile, supply chains have evolved into complex networks, which complicates the role that supply chain partners play in innovation and financial performance of firms. Previous research has mainly focused on the direct effect of innovation on a firm's financial performance, overlooking the innovativeness and complexity of supply networks. In this research, we focus on a firm's supply base, defined as the first tier of a supply network, and investigate the relationship between the intensity of R&D within the supply base and the financial performance of the focal firm. We also examine the moderating role of three aspects of supply base complexity-Number of suppliers, differentiation, and interrelationships among suppliers. Utilizing secondary data from Bloomberg and Compustat, we find that the R&D intensity of a firm's supply base is positively associated with the firm's financial performance. Further, all three aspects of supply base complexity negatively moderate this relationship. These findings make important contributions to the literature by establishing a direct, positive relationship between supply base R&D and firm financial performance, which is attenuated by complexities within the supply base.

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