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Offshoring Brains? Evidence on the Complementarity between Manufacturing and R&D in Danish Firms

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  • Svend Greniman Andersen

Abstract

By employing a firm‐level linked employer–employee dataset for Danish manufacturing firms, this paper investigates whether offshoring is complementary to, or a substitute for, research and development (R&D) activities. Offshoring is instrumented with world export supply to circumvent the inherent endogenous nature of the firm's decision to offshore. Results suggest that firms with increased offshoring do in fact tend to engage in further R&D activities at home. Moreover, they also tend to reallocate R&D resources toward product R&D, possibly at the expense of process R&D.

Suggested Citation

  • 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.
    • Handle: RePEc:bla:scandj:v:122:y:2020:i:4:p:1315-1342
    DOI: 10.1111/sjoe.12388
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    References listed on IDEAS

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