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Offshoring and Home Country R&D

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  • Karpaty, Patrik

    (Örebro University)

  • Tingvall, Patrik Gustavsson

    (Stockholm School of Economics and CESIS)

Abstract

National concerns are sometimes raised against offshoring of economic activities to other countries. While most of the existing literature has focused on the effects on labor demand and productivity the effects on domestic R&D have been neglected. This is unfortunate since the decision to offshore activities also includes R&D. We use unique and rich firm level data for the Swedish manufacturing sector to analyze how offshoring impacts domestic R&D and how these effects vary with respect to target region and type of firm. The results suggest that offshoring of production alter a firm’s investments in R&D in Sweden and that a negative impact on home country R&D is confined to offshoring by non-multinationals and offshoring to Europe and EU15 countries.

Suggested Citation

  • Karpaty, Patrik & Tingvall, Patrik Gustavsson, 2011. "Offshoring and Home Country R&D," Working Paper Series in Economics and Institutions of Innovation 254, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0254
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    Cited by:

    1. Bernhard Dachs & Bernd Ebersberger & Steffen Kinkel & Oliver Som, 2015. "The effects of production offshoring on R&D and innovation in the home country," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 9-31, March.
    2. Ioannis Bournakis & Michela Vecchi & Francesco Venturini, 2018. "Off‐Shoring, Specialization and R&D," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(1), pages 26-51, March.
    3. Tobias Brändle & Andreas Koch, 2017. "Offshoring and Outsourcing Potentials: Evidence from German Micro-Level Data," The World Economy, Wiley Blackwell, vol. 40(9), pages 1775-1806, September.
    4. Fritsch, Ursula, 2015. "Is Offshoring Beneficial or Detrimental to Innovation in Developed Countries?," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112973, Verein für Socialpolitik / German Economic Association.
    5. Damian Kedziora & Elzbieta Klamut & Timo Karri & Andrzej Kraslawski, 2017. "Higher Education Offshoring as an Innovative Response to Global Learning Challenges," International Journal of Management, Knowledge and Learning, International School for Social and Business Studies, Celje, Slovenia, vol. 6(2), pages 239-260.
    6. Svend Greniman Andersen, 2020. "Offshoring Brains? Evidence on the Complementarity between Manufacturing and R&D in Danish Firms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(4), pages 1315-1342, October.

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    More about this item

    Keywords

    Offshoring; R&D; Manufacturing sector; EU15;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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