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Offshoring and Innovation Capabilities: Evidence from Swedish Manufacturing

Author

Listed:
  • Baum, Christopher F

    (Boston College and DIW Berlin)

  • Lööf, Hans

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Perez, Luis

    (University of Minnesota)

  • Stephan, Andreas

    (Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS))

Abstract

This paper examines the impact of global value chains on rms' innovation capabilities. Using the United Nations Broad Economic Categories (BEC) system to identify offshoring-related intermediate imports, we study contracting out production over the period 2001-2014 from about 7,000 mainly small Swedish manufacturing frms to six different destinations and test hypotheses on improvements and outcomes of innovation capabilities. Our empirical fndings show that the strategy to participate in global value chains increases frms' innovative capability regardless of frms' technology intensity. The results are robust to a wide set of controls and in line with predictions in recent models of directed technical change.

Suggested Citation

  • Baum, Christopher F & Lööf, Hans & Perez, Luis & Stephan, Andreas, 2018. "Offshoring and Innovation Capabilities: Evidence from Swedish Manufacturing," Working Paper Series in Economics and Institutions of Innovation 469, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0469
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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