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Outsourcing: Volume and Composition of R&D

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Author Info

  • Hamid Beladi

    (University of Texas at San Antonio)

  • Sugata Marjit

    (Centre for Studies in Social Sciences)

  • Lei Yang

    (The Hong Kong Polytechnic University)

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    Abstract

    This paper examines the impact of the outsourcing of production on the volume and composition of the home country’s research and development. We find that outsourcing decreases the process R&D of the multinational firm in large markets when it only conducts process R&D (the substitution effect between outsourcing and process R&D). Outsourcing tends to emerge as a complementary factor to product development when the multinational firm conducts both product R&D and process R&D (the complementary effect between outsourcing and product R&D) under some conditions. This implies that international outsourcing has a different effect on product innovation and process innovation.

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    File URL: http://business.utsa.edu/wps/eco/0001ECO-414-2011.pdf
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    Bibliographic Info

    Paper provided by College of Business, University of Texas at San Antonio in its series Working Papers with number 0001.

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    Length: 35 pages
    Date of creation:
    Date of revision:
    Handle: RePEc:tsa:wpaper:0001

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    Related research

    Keywords: Outsourcing; Product R&D; Process R&D;

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    1. Batra, Raveendra N, 1973. "Nontraded Goods, Factor Market Distortions, and the Gains from Trade," American Economic Review, American Economic Association, vol. 63(4), pages 706-13, September.
    2. Panos Hatzipanayotou & Sajal Lahiri & Michael S. Michael, 2000. "Can Cross-Border Pollution Reduce Pollution?," CESifo Working Paper Series 360, CESifo Group Munich.
    3. Batra, Raveendra N, 1984. "Non-traded Goods and the Metzler-Paradox: A Comment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(3), pages 763-67, October.
    4. Dei, Fumio, 1985. "Voluntary export restraints and foreign investment," Journal of International Economics, Elsevier, vol. 19(3-4), pages 305-312, November.
    5. Yohe, Gary W., 1979. "The backward incidence of pollution control--some comparative statics in general equilibrium," Journal of Environmental Economics and Management, Elsevier, vol. 6(3), pages 187-198, September.
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