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Going offshore or better staying in? Spatial relocation strategies and their impact on firm innovativeness

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  • Fabian Kreutzer
  • Timo Mitze

Abstract

We analyse the short- to mid-run effects of spatial relocation strategies on firm innovativeness and productivity growth. Using conditional difference-in-difference estimation with multiple treatments, we find for a sample of German firms in 1999–2013 that offshoring has a statistically significant negative impact on the firms’ innovation activity and productivity growth vis-à-vis nonrelocating comparison firms. In contrast, we find a positive link between domestic relocation activities and the firms’ propensity to introduce a product innovation. Firms should thus carefully account for potentially distorting performance effects when deciding about the spatial scale of relocation strategies in the short to mid-run.

Suggested Citation

  • Fabian Kreutzer & Timo Mitze, 2017. "Going offshore or better staying in? Spatial relocation strategies and their impact on firm innovativeness," Applied Economics Letters, Taylor & Francis Journals, vol. 24(12), pages 837-840, July.
    • Handle: RePEc:taf:apeclt:v:24:y:2017:i:12:p:837-840
    DOI: 10.1080/13504851.2016.1231892
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    Cited by:

    1. Timo Mitze & Fabian Kreutzer, 2023. "Relocation, innovation, and the difference that firm size makes: Insights for global sourcing strategies of SMEs," Journal of International Entrepreneurship, Springer, vol. 21(3), pages 354-384, September.
    2. Chen, Stephen & Lin, Nidthida, 2019. "The effect of inter- and intra-organizational distances on success of offshored outsourced innovation: A configurational approach," Journal of Business Research, Elsevier, vol. 103(C), pages 519-529.

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