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

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  • 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.
    2. Bas, Christian Le & Sierra, Christophe, 2002. "'Location versus home country advantages' in R&D activities: some further results on multinationals' locational strategies," Research Policy, Elsevier, vol. 31(4), pages 589-609, May.
    3. Eero Lehto, 2007. "Regional Impact of Research and Development on Productivity," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 623-638.
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    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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