A tale of two literatures: Transaction costs and property rights in innovation outsourcing
AbstractThis paper investigates the relative importance of property rights (PR) and transactions cost (TC) factors in driving the decision of firms to outsource innovation. The TC literature explains a small part of outsourcing decisions (cost saving motives) while the PR literature deals with revenue maximisation. Using data for over 8,000 firms from the UK Community Innovation Survey, we find that PR variables dominate over TC variables. Our results suggest that the decision to outsource innovation is mostly driven by the ability of firms to control information leakages, less so by cost motives.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Research Policy.
Volume (Year): 36 (2007)
Issue (Month): 10 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/respol
Other versions of this item:
- Nishaal Gooroochurn & Aoife Hanley, 2006. "A Tale of Two Literatures: Transaction Cost and Property Rights in Innovation Outsourcing," Occasional Papers 17, Industrial Economics Division.
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Claudio A . Piga & Marco Vivarelli, 2004.
"Internal and External R&D: A Sample Selection Approach,"
Oxford Bulletin of Economics and Statistics,
Department of Economics, University of Oxford, vol. 66(4), pages 457-482, 09.
- Claudio A. Piga & Marco Vivarelli, 2003. "Internal and External R&D: A Sample Selection Approach," Papers on Entrepreneurship, Growth and Public Policy 2004-05, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- Steven Tadelis & Oliver E.Williamson, 2012.
"Transaction Cost Economics
[The Handbook of Organizational Economics]," Introductory Chapters, Princeton University Press.
- Robert C. Feenstra & Gordon H. Hanson, 2005.
"Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm,"
The Quarterly Journal of Economics,
MIT Press, vol. 120(2), pages 729-761, May.
- Robert C. Feenstra & Gordon H. Hanson, 2004. "Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm," NBER Working Papers 10198, National Bureau of Economic Research, Inc.
- Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 783-832.
- Hart, Oliver D. & Moore, John, 1990.
"Property Rights and the Nature of the Firm,"
3448675, Harvard University Department of Economics.
- Small, Kenneth A & Hsiao, Cheng, 1985. "Multinomial Logit Specification Tests," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 619-27, October.
- Kamien, Morton I. & Zang, Israel, 2000. "Meet me halfway: research joint ventures and absorptive capacity," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 995-1012, October.
- D. McFadden & J. Hausman, 1981.
"Specification Tests for the Multinominal Logit Model,"
292, Massachusetts Institute of Technology (MIT), Department of Economics.
- Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-40, September.
- Gorg, Holger & Hanley, Aoife, 2005. "International outsourcing and productivity: evidence from the Irish electronics industry," The North American Journal of Economics and Finance, Elsevier, vol. 16(2), pages 255-269, August.
- Grossman, Sanford J & Hart, Oliver, 1985.
"The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration,"
CEPR Discussion Papers
70, C.E.P.R. Discussion Papers.
- Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
- Grossman, Sanford J. & Hart, Oliver D., 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Scholarly Articles 3450060, Harvard University Department of Economics.
- Oliver Hart & Sanford Grossman, 1985. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Working papers 372, Massachusetts Institute of Technology (MIT), Department of Economics.
- Kraft, Kornelius, 1989. "Market Structure, Firm Characteristics and Innovative Activity," Journal of Industrial Economics, Wiley Blackwell, vol. 37(3), pages 329-36, March.
- James Love & Stephen Roper, 1999. "The Determinants of Innovation: R & D, Technology Transfer and Networking Effects," Review of Industrial Organization, Springer, vol. 15(1), pages 43-64, August.
- Bruno Cassiman & Reinhilde Veugelers, 2002. "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium," American Economic Review, American Economic Association, vol. 92(4), pages 1169-1184, September.
- Audretsch, David B. & Santarelli, Enrico & Vivarelli, Marco, 1999. "Start-up size and industrial dynamics: some evidence from Italian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 17(7), pages 965-983, October.
- Hoetker, Glenn, 2004. "Confounded Coefficients: Accurately Comparing Logit and Probit Coefficients across Groups," Working Papers 03-0100, University of Illinois at Urbana-Champaign, College of Business.
- Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-90, September.
- Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
- Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
- Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
- James E. Rauch, 1996.
"Networks versus Markets in International Trade,"
NBER Working Papers
5617, National Bureau of Economic Research, Inc.
- James H. Love & Stephen Roper, 2005. "Economists' perceptions versus managers' decisions: an experiment in transaction-cost analysis," Cambridge Journal of Economics, Oxford University Press, vol. 29(1), pages 19-36, January.
- Audretsch, D-B & Menkveld, A-J & Thurik, A-R, 1996. "The Decision Between Internal and External R&D," Papers 9603/e, NEUHUYS - RESEARCH INSTITUTE FOR SMALL AND MEDIUM.
- Pascucci, Stefano & Royer, Annie & Bijman, Jos, 2011. "Should I Make or Should I Buy? Innovation Strategies and Governance Structures in the Italian Food Sector," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 2(2).
- Lichtenthaler, Ulrich, 2009.
"The role of corporate technology strategy and patent portfolios in low-, medium- and high-technology firms,"
Elsevier, vol. 38(3), pages 559-569, April.
- Lichtenthaler, Ulrich, 2010. "Determinants of proactive and reactive technology licensing: A contingency perspective," Research Policy, Elsevier, vol. 39(1), pages 55-66, February.
- Pascucci, Stefano & Royer, Annie & Bijman, Jos, 2012. "To Make or to Buy: Is this the Question?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 15(3).
- Cohen, Maurie J., 2010. "Destination unknown: Pursuing sustainable mobility in the face of rival societal aspirations," Research Policy, Elsevier, vol. 39(4), pages 459-470, May.
- Martinez-Noya, Andrea & Garcia-Canal, Esteban & Guillen, Mauro F., 2012. "International R&D service outsourcing by technology-intensive firms: Whether and where?," Journal of International Management, Elsevier, vol. 18(1), pages 18-37.
- Eilhard, Jan, 2008. "Firms on SourceForge," MPRA Paper 7809, University Library of Munich, Germany.
- Peukert, Christian, 2011. "External technology supply and client-side innovation," ZEW Discussion Papers 11-082, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- KANI Masayo & MOTOHASHI Kazuyuki, 2013. "Determinants of Demand for Technology in Relationships with Complementary Assets in Japanese Firms," Discussion papers 13033, Research Institute of Economy, Trade and Industry (RIETI).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.