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Foreign outsourcing and the product cycle: evidence from micro data


  • Eiichi Tomiura


This article provides empirical evidence on the product cycle and the firm's make-or-buy decision by using a firm-level data set with a direct measure of foreign outsourcing. Across industries, foreign outsourcing tends to be inactive in R&D-intensive industries. Within each industry, products exported from the home country are on average significantly more R&D intensive than those outsourced to independent foreign firms. Products manufactured within subsidiaries at South tend to have medium R&D intensity. This ordering in R&D intensity is consistent with the theoretical prediction.

Suggested Citation

  • Eiichi Tomiura, 2008. "Foreign outsourcing and the product cycle: evidence from micro data," Applied Economics Letters, Taylor & Francis Journals, vol. 15(13), pages 1019-1022.
  • Handle: RePEc:taf:apeclt:v:15:y:2008:i:13:p:1019-1022 DOI: 10.1080/13504850600972360

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    References listed on IDEAS

    1. Robert Gibbons & Michael Waldman, 1999. "A Theory of Wage and Promotion Dynamics Inside Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1321-1358.
    2. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 881-919.
    3. McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April.
    4. Robert Gibbons, 1996. "Incentives and Careers in Organizations," NBER Working Papers 5705, National Bureau of Economic Research, Inc.
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    Cited by:

    1. OKUBO Toshihiro & Matthew A. COLE & Robert J.R. ELLIOTT, 2010. "Environmental Outsourcing," Discussion papers 10055, Research Institute of Economy, Trade and Industry (RIETI).
    2. Matthew Cole & Robert Elliott & Toshihiro Okubo, 2014. "International environmental outsourcing," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(4), pages 639-664, November.
    3. Tomohiro Ara, 2014. "Global Sourcing in Industry Equilibrium," The Japanese Economic Review, Japanese Economic Association, vol. 65(1), pages 93-115, March.

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