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Offshoring and Home Country R&D

Author

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  • Patrik Karpaty
  • Patrik Gustavsson Tingvall

Abstract

type="main" xml:id="twec12226-abs-0001"> National concerns are occasionally raised against offshoring economic activities to other countries. While most of the existing literature has focused on the effects on labour demand and productivity, the effects on domestic R&D have largely been neglected. Using Swedish firm-level data, we analyse the effects of material offshoring on the R&D intensity of domestic firms. The results suggest that the overall impact of offshoring on R&D is negative. The negative effect on home country R&D stems from offshoring by small firms from other high-income countries. Conversely, offshoring increases home country R&D among large firms. As large firms perform the bulk of Swedish R&D, the net effect of offshoring on R&D is positive.

Suggested Citation

  • Patrik Karpaty & Patrik Gustavsson Tingvall, 2015. "Offshoring and Home Country R&D," The World Economy, Wiley Blackwell, vol. 38(4), pages 655-676, April.
    • Handle: RePEc:bla:worlde:v:38:y:2015:i:4:p:655-676
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    File URL: http://hdl.handle.net/10.1111/twec.2015.38.issue-4
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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. Afonso, Oscar & Gil, Pedro Mazeda, 2024. "Territorial comparative advantage, wage inequality, and monetary policy in the global world," Journal of International Money and Finance, Elsevier, vol. 143(C).
    5. Timo Mitze & Fabian Kreutzer, 2023. "Relocation, innovation, and the difference that firm size makes: Insights for global sourcing strategies of SMEs," Journal of International Entrepreneurship, Springer, vol. 21(3), pages 354-384, September.
    6. 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.
    7. repec:isv:jouijm:v:6:y:2017:i:2:p:239-260 is not listed on IDEAS
    8. Xie, En & Lin, Jiaxin & Zou, Honghui, 2025. "How does outward FDI in developed economies affect the R&D of emerging economy firms? An attention-based view," Journal of International Management, Elsevier, vol. 31(1).
    9. repec:wsr:ecbook:2013:i:v-001 is not listed on IDEAS
    10. 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.

    More about this item

    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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