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Do specialists exit the firm outsourcing its R&D?

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  • Wenjing Wang

    (Department of Economics and Business, Aarhus University, Denmark)

Abstract

Do specialists exit the firm increasingly outsourcing its research and development (R&D) work? Although this question is critical in understanding how R&D outsourcing links to innovation performance, the answer is not yet clear. This paper proposes that the optimal level of firm’s internal employment of R&D specialists decreases with the deepening of R&D outsourcing but increases with the broadening of R&D outsourcing. These relations can be inferred from previous empirical studies as well as our theoretical analysis, and are supported by the empirical evidence from estimations of correlated random effects (CRE) Tobit, CRE selection and CRE fractional response models on a panel dataset of Danish firms.

Suggested Citation

  • Wenjing Wang, 2014. "Do specialists exit the firm outsourcing its R&D?," Economics Working Papers 2014-21, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2014-21
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    More about this item

    Keywords

    Correlated random effect models; employment of R&D specialists; R&D strategy; R&D outsourcing breadth and depth;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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