IDEAS home Printed from https://ideas.repec.org/p/cen/wpaper/16-19.html
   My bibliography  Save this paper

Outsourced R&D and GDP Growth

Author

Listed:
  • Anne Marie Knott

Abstract

Endogenous growth theory holds that growth should increase with R&D. However coarse comparison between R&D and US GDP growth over the past forty years indicates that inflation scientific labor increased 2.5 times, while GDP growth was at best stagnant. The leading explanation for the disconnect between theory and the empirical record is that R&D has gotten harder. I develop and test an alternative view that firms have become worse at it. I find no evidence R&D has gotten harder. Instead I find firms’ R&D productivity declined 65%, and that the main culprit in the decline is outsourced R&D, which is unproductive for the funding firm. This offers hope firms’ R&D productivity and economic growth may be fairly easily restored by bringing outsourced R&D back in-house.

Suggested Citation

  • Anne Marie Knott, 2016. "Outsourced R&D and GDP Growth," Working Papers 16-19, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:16-19
    as

    Download full text from publisher

    File URL: https://www2.census.gov/ces/wp/2016/CES-WP-16-19.pdf
    File Function: First version, 2016
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bruno Cassiman & Reinhilde Veugelers, 2006. "In Search of Complementarity in Innovation Strategy: Internal R& D and External Knowledge Acquisition," Management Science, INFORMS, vol. 52(1), pages 68-82, January.
    2. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    3. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
    4. Helfat, C.E. & Raubitschek, R.S., 2000. "Product Sequencing: Co-Evolution of Knowledge, Capabilities and Products," Papers 00-1, U.S. Department of Justice - Antitrust Division.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christoph Grimpe & Ulrich Kaiser, 2010. "Balancing Internal and External Knowledge Acquisition: The Gains and Pains from R&D Outsourcing," Journal of Management Studies, Wiley Blackwell, vol. 47(8), pages 1483-1509, December.
    2. Herstad, Sverre J. & Sandven, Tore & Ebersberger, Bernd, 2015. "Recruitment, knowledge integration and modes of innovation," Research Policy, Elsevier, vol. 44(1), pages 138-153.
    3. Baier , Elisabeth & Rammer , Christian & Schubert , Torben, 2013. "The Impact of Innovation Off-shoring on Organizational Adaptability," Papers in Innovation Studies 2013/44, Lund University, CIRCLE - Centre for Innovation Research.
    4. Niron Hashai & Ivo Zander, 2019. "Dynamics in the Origins of Technological Knowledge in Early Firm Years: Implications for New Product Introductions," Strategy Science, INFORMS, vol. 4(3), pages 217-233, September.
    5. Herstad, Sverre J. & Aslesen, Heidi Wiig & Ebersberger, Bernd, 2014. "On industrial knowledge bases, commercial opportunities and global innovation network linkages," Research Policy, Elsevier, vol. 43(3), pages 495-504.
    6. Sverre J. Herstad & Tore Sandven, 2020. "A closer look at the relationship between innovation and employment growth at the firm level," Journal of Evolutionary Economics, Springer, vol. 30(2), pages 375-399, April.
    7. Alicia Barroso & Marco S. Giarratana & Samira Reis & Olav Sorenson, 2016. "Crowding, satiation, and saturation: The days of television series' lives," Strategic Management Journal, Wiley Blackwell, vol. 37(3), pages 565-585, March.
    8. Jaideep Anand & Louis Mulotte & Charlotte R. Ren, 2016. "Does experience imply learning?," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1395-1412, July.
    9. Gómez, Jaime & Salazar, Idana & Vargas, Pilar, 2020. "The Role Of Extramural R&D And Scientific Knowledge In Creating High Novelty Innovations: An Examination Of Manufacturing And Service Firms In Spain," Research Policy, Elsevier, vol. 49(8).
    10. Li, Lei & Li, Dan & Goerzen, Anthony & Shi, Weilei (Stone), 2018. "What and how do SMEs gain by going international? A longitudinal investigation of financial and intellectual resource growth," Journal of World Business, Elsevier, vol. 53(6), pages 817-834.
    11. Fındık, Derya & Tansel, Aysit, 2013. "Resources on the stage: a firm level analysis of the ict adoption in Turkey," MPRA Paper 65956, University Library of Munich, Germany, revised 05 Aug 2014.
    12. Chang, Eric C. & Cheng, Joseph W. & Khorana, Ajay, 2000. "An examination of herd behavior in equity markets: An international perspective," Journal of Banking & Finance, Elsevier, vol. 24(10), pages 1651-1679, October.
    13. He, Qichun, 2018. "Inflation and innovation with a cash-in-advance constraint on human capital accumulation," Economics Letters, Elsevier, vol. 171(C), pages 14-18.
    14. Chen, Hung-Ju, 2019. "Innovation and FDI: Does the Target of Intellectual Property Rights Matter?," MPRA Paper 94692, University Library of Munich, Germany.
    15. Boikos, Spyridon & Bucci, Alberto & Stengos, Thanasis, 2013. "Non-monotonicity of fertility in human capital accumulation and economic growth," Journal of Macroeconomics, Elsevier, vol. 38(PA), pages 44-59.
    16. Phil Holmes & Vasileios Kallinterakis & M P Leite Ferreira, 2013. "Herding in a Concentrated Market: a Question of Intent," European Financial Management, European Financial Management Association, vol. 19(3), pages 497-520, June.
    17. Turnovsky, Stephen J, 2004. "The Transitional Dynamics of Fiscal Policy: Long-Run Capital Accumulation and Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(5), pages 883-910, October.
    18. Ruomeng Cui & Dennis J. Zhang & Achal Bassamboo, 2019. "Learning from Inventory Availability Information: Evidence from Field Experiments on Amazon," Management Science, INFORMS, vol. 65(3), pages 1216-1235, March.
    19. Michael McAleer & Kim Radalj, 2013. "Herding, Information Cascades and Volatility Spillovers in Futures Markets," Journal of Reviews on Global Economics, Lifescience Global, vol. 2, pages 307-329.
    20. Subir Bose & Gerhard Orosel & Marco Ottaviani & Lise Vesterlund, 2006. "Dynamic monopoly pricing and herding," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 910-928, December.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cen:wpaper:16-19. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/cesgvus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dawn Anderson (email available below). General contact details of provider: https://edirc.repec.org/data/cesgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.