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Outsourcing: Volume and Composition of R&D

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  • Hamid Beladi
  • Sugata Marjit
  • Lei Yang

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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  • Hamid Beladi & Sugata Marjit & Lei Yang, 2012. "Outsourcing: Volume and Composition of R&D," Review of International Economics, Wiley Blackwell, vol. 20(4), pages 828-840, September.
    • Handle: RePEc:bla:reviec:v:20:y:2012:i:4:p:828-840
    DOI: j.1467-9396.2012.01058.x
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    Citations

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    Cited by:

    1. Kabiraj, Tarun & Sinha, Uday Bhanu, 2016. "Strategic outsourcing with technology transfer under price competition," International Review of Economics & Finance, Elsevier, vol. 44(C), pages 281-290.
    2. Sugata Marjit & Suryaprakash Misra & Dyuti S Banerjee, 2017. "Technology improvement and market structure alteration," Economics Bulletin, AccessEcon, vol. 37(2), pages 1106-1112.
    3. Cao, Jiyun & Mukherjee, Arijit & Sinha, Uday Bhanu, 2018. "Firm-asymmetry and strategic outsourcing," International Review of Economics & Finance, Elsevier, vol. 53(C), pages 16-24.
    4. Gouranga Gopal Das & Sugata Marjit, 2018. "Skill, Innovation and Wage Inequality: Can Immigrants be the Trump Card?," CESifo Working Paper Series 7082, CESifo.
    5. Tarun Kabiraj & Uday Bhanu Sinha, 2017. "Outsourcing under incomplete information," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 10(1), pages 3-15, April.
    6. OKOSHI Hirofumi, 2021. "Innovation for Tax Avoidance: Product Differentiation and the Arm's Length Principle," Discussion papers 21038, Research Institute of Economy, Trade and Industry (RIETI).
    7. Hamid Beladi & Sugata Marjit & Xinpeng Xu & Lei Yang, 2016. "Strategic Enforcement, Intellectual Property Rights, And Contractual R&D," Economic Inquiry, Western Economic Association International, vol. 54(4), pages 1904-1917, October.
    8. Dirk Bursian & Arne J. Nagengast, 2020. "Offshoring And The Polarization Of The Demand For Capital," Economic Inquiry, Western Economic Association International, vol. 58(1), pages 260-282, January.
    9. Marjit, Sugata & Yang, Lei, 2015. "Does intellectual property right promote innovations when pirates are innovators?," International Review of Economics & Finance, Elsevier, vol. 37(C), pages 203-207.

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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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