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The Impact of R&D Offshoring on the Home Knowledge Production of OECD Investing Regions

Author

Listed:
  • Lorena M. D’Agostino
  • Keld Laursen
  • Grazia Santangelo

Abstract

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.

Suggested Citation

  • Lorena M. D’Agostino & Keld Laursen & Grazia Santangelo, 2010. "The Impact of R&D Offshoring on the Home Knowledge Production of OECD Investing Regions," DRUID Working Papers 10-19, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:10-19
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    References listed on IDEAS

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    1. Andres Rodriguez-Pose & Riccardo regstdcenzi, 2008. "Research and Development, Spillovers, Innovation Systems, and the Genesis of Regional Growth in Europe," Regional Studies, Taylor & Francis Journals, vol. 42(1), pages 51-67.
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    Cited by:

    1. Lorena D’Agostino, 2015. "The neglected effects of R&D captive offshoring in emerging countries on the creation of knowledge at home," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 61-91, March.
    2. Castellani, Davide & Pieri, Fabio, 2013. "R&D offshoring and the productivity growth of European regions," Research Policy, Elsevier, vol. 42(9), pages 1581-1594.
    3. Cristina Castelli & Davide Castellani, 2013. "The internationalisation of r&d: sectoral and geographic patterns of cross-border investments," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2013(1), pages 127-143.
    4. Sleuwaegen, Leo & Boiardi, Priscilla, 2014. "Creativity and regional innovation: Evidence from EU regions," Research Policy, Elsevier, vol. 43(9), pages 1508-1522.
    5. 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.
    6. Montresor, Sandro & Vezzani, Antonio, 2015. "The production function of top R&D investors: Accounting for size and sector heterogeneity with quantile estimations," Research Policy, Elsevier, vol. 44(2), pages 381-393.
    7. Dzemydaitė Giedrė & Galinienė Birutė & Dzemyda Ignas, 2016. "The Efficiency of Regional Innovation Systems in New Member States of the European Union: A Nonparametric DEA Approach," Economics and Business, De Gruyter Open, vol. 28(1), pages 83-89, April.
    8. Davide Castellani & Maria Mancusi & Grazia Santangelo & Antonello Zanfei, 2015. "Exploring the links between offshoring and innovation," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 1-7, March.
    9. Baier, Elisabeth & Rammer, Christian & Schuber, Torben, 2013. "The impact on innovation off-shoring on organizational adaptability," ZEW Discussion Papers 13-109, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    10. Commission of Experts for Research and Innovation (EFI), Berlin (ed.), 2012. "Research, innovation and technological performance in Germany - EFI Report 2012," Research, Innovation and Technological Performance in Germany: Report, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin, volume 127, number 2012e, April.
    11. Jérôme Danguy, 2014. "Who collaborates with whom: the role of technological distance in international innovation," iCite Working Papers 2014-010, ULB -- Universite Libre de Bruxelles.
    12. repec:eee:iburev:v:26:y:2017:i:5:p:855-866 is not listed on IDEAS
    13. Patrik Karpaty & Patrik Gustavsson Tingvall, 2015. "Offshoring and Home Country R&D," The World Economy, Wiley Blackwell, vol. 38(4), pages 655-676, April.
    14. repec:eee:tefoso:v:120:y:2017:i:c:p:14-23 is not listed on IDEAS
    15. Dachs, Bernhard, 2017. "Internationalisation of R&D: A Review of Drivers, Impacts, and new Lines of Research," MPRA Paper 83367, University Library of Munich, Germany.
    16. repec:eee:retrec:v:61:y:2017:i:c:p:2-14 is not listed on IDEAS
    17. Keld Laursen, 2015. "Revealed comparative advantage and the alternatives as measures of international specialization," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(1), pages 99-115, June.
    18. Lorena M. D'Agostino & Grazia D. Santangelo, 2012. "The Global Fragmentation of R&D Activities: The Home Region Perspective," DRUID Working Papers 12-06, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    19. Colin Davis & Ken-ichi Hashimoto, 2016. "Innovation and Manufacturing Offshoring with Fully Endogenous Productivity Growth," Discussion Papers 1636, Graduate School of Economics, Kobe University.
    20. Laurens, Patricia & Le Bas, Christian & Schoen, Antoine & Villard, Lionel & Larédo, Philippe, 2015. "The rate and motives of the internationalisation of large firm R&D (1994–2005): Towards a turning point?," Research Policy, Elsevier, vol. 44(3), pages 765-776.
    21. Jérôme Danguy, 2014. "Globalization of Innovation Production: A Patent-Based Industry Analysis," iCite Working Papers 2014-009, ULB -- Universite Libre de Bruxelles.
    22. Andre Jungmittag, 2016. "Techno-Globalisierung," EIIW Discussion paper disbei221, Universitätsbibliothek Wuppertal, University Library.

    More about this item

    Keywords

    Home Region R&D; Offshore R&D; Knowledge Production; Complementarity; Emerging Countries;

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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