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R&D Offshoring and the Productivity Growth of European Regions

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  • Davide Castellani

    (Department of Economics, Finance and Statistics, University of Perugia and Centro Studi Luca D'Agliano, Milan)

  • Fabio Pieri

    (Department of Economics, Finance and Statistics, University of Perugia)

Abstract

The recent increase in R&D o shoring have raised fears that knowledge and competitive- ness in advanced countries may be at risk of `hollowing out'. At the same time, economic research has stressed that this process is also likely to allow some reverse technology transfer and foster growth at home. This paper addresses this issue by investigating the extent to which R&D o shoring is associated with productivity dynamics of European (NUTS2) regions. In particular, we explore whether R&D investments abroad have a di erent impact from those in manufacturing and other business activities. We nd that o shoring regions have higher productivity growth, but this positive e ect fades down with the number of investment projects carried out abroad. However, a large and positive correlation emerge between the extent of R&D o shoring and the home region produc- tivity growth, supporting the idea that carrying out R&D abroad strengthen European competitiveness.

Suggested Citation

  • Davide Castellani & Fabio Pieri, 2011. "R&D Offshoring and the Productivity Growth of European Regions," Working Papers 1120, Department of Applied Economics II, Universidad de Valencia.
  • Handle: RePEc:eec:wpaper:1120
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    More about this item

    Keywords

    Regional Productivity; Foreign Investments; Europe; R&D Offshoring;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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