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The impact of R&D offshoring on the home knowledge production of OECD investing regions

  • Lorena M. D'Agostino
  • Keld Laursen
  • Grazia D. Santangelo

This paper investigates the relationship between home and offshore R&D activities on the knowledge production of the investing home region. Debate is ongoing on whether R&D offshoring complements the R&D performed at home. In the light of increased offshoring of innovative activities to emerging countries, we explicitly focus on Brazil, Russia, India, China, Singapore and Taiwan. We suggest that complementarity should obtain, when home region and offshore R&D activities are dissimilar as well as when offshore R&D activities is about modular and less complex technologies. We ground our predictions on arguments related to geographical technological specialisation and reverse knowledge transfer from offshore locations to home regions within the more general open innovation trend. Using a theoretical framework based on the international business literature and the regional system of innovation perspective, we estimate a knowledge production function for a sample of 221 regions from 21 OECD countries with home region patent applications as the dependent variable. Our test supports our predictions on the complementarity between home region and offshore R&D.

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Article provided by Oxford University Press in its journal Journal of Economic Geography.

Volume (Year): 13 (2013)
Issue (Month): 1 (January)
Pages: 145-175

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Handle: RePEc:oup:jecgeo:v:13:y:2013:i:1:p:145-175
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  1. Andrés Rodríguez-Pose & Riccardo Crescenzi, 2008. "Research and development, spillovers, innovation systems, and the genesis of regional growth in Europe," LSE Research Online Documents on Economics 23326, London School of Economics and Political Science, LSE Library.
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