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A Tale of Two Literatures: Transaction Cost and Property Rights in Innovation Outsourcing

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Author Info
Nishaal Gooroochurn () (Nottingham University Business School)
Aoife Hanley () (Nottingham University Business School)

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Abstract

This 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.

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Paper provided by Industrial Economics Division in its series Occasional Papers with number 17.

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Date of creation: 04 2006
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Handle: RePEc:nub:occpap:17

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Keywords: transaction cost property rights innovation

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Find related papers by JEL classification:
L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
O3 - Economic Development, Technological Change, and Growth - - Technological Change

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Cited by:
(explanations, 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.)

  1. Eilhard, Jan, 2008. "Firms on SourceForge," MPRA Paper 7809, University Library of Munich, Germany. [Downloadable!]
  2. Christoph Grimpe & Ulrich Kaiser, 2008. "Gains and Pains from Contract Research: A Transaction and Firm-level Perspective," CIE Discussion Papers 2008-01, University of Copenhagen. Department of Economics. Centre for Industrial Economics. [Downloadable!]
    Other versions:
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