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The Impact of Captive Innovation Offshoring on the Effectiveness of Organizational Adaptation

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  • Baier, Elisabeth

    () (PTV Group AG, Karlsruhe, Germany)

  • Rammer, Christian

    () (ZEW, Mannheim, Germany)

  • Schubert, Torben

    () (CIRCLE, Lund University & Fraunhofer ISI, Karlsruhe, Germany)

Abstract

We analyze the effects of captive offshoring of innovation activities on the ability of the firms to adapt their organizational structures. Basing our arguments on complexity theory, we use three consecutive waves of the German part of the Community Innovation Survey to test our hypotheses. We find an inverted u-shape of innovation offshoring on the effectiveness of organizational adaptability, implying an optimal threshold value of innovation offshoring. This value is 11% for share of offshored R&D, 15% for downstream innovation activities such as local market adaptation, and 34% for design activities. We also analyze several contingency variables. In particular, we show that the costs of innovation offshoring in terms of reduced organizational adaptation are increased by a regional dispersion of the offshoring activities and strong embeddedness in onshore networks. We also show that smaller firms find it easier to deal with the management complexity induced by geographical dispersion of innovation activities.

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  • Baier, Elisabeth & Rammer, Christian & Schubert, Torben, 2015. "The Impact of Captive Innovation Offshoring on the Effectiveness of Organizational Adaptation," Papers in Innovation Studies 2015/22, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  • Handle: RePEc:hhs:lucirc:2015_022
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    Cited by:

    1. Schubert, Torben & Baier, Elisabeth & Rammer, Christian, 2017. "Firm Capabilities, Technological Dynamism and Innovation Internationalisation – a Behavioural Approach," Papers in Innovation Studies 2017/13, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    2. repec:eee:iburev:v:26:y:2017:i:3:p:405-416 is not listed on IDEAS
    3. repec:spr:manint:v:57:y:2017:i:6:d:10.1007_s11575-017-0326-y is not listed on IDEAS
    4. Rammer, Christian & Schubert, Torben, 2016. "Concentration on the few? R&D and innovation in German firms 2001 to 2013," ZEW Discussion Papers 16-005, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. repec:eee:respol:v:47:y:2018:i:2:p:379-389 is not listed on IDEAS
    6. Neuhäusler , Peter & Schubert, Torben & Frietsch , Rainer & Blind , Knut, 2015. "Managing Portfolio Risk in Strategic Technology Management: Evidence from a Panel Data Set of the World’s Largest R&D Performers," Papers in Innovation Studies 2015/41, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    7. Schubert, Torben & Baier, Elisabeth & Rammer, Christian, 2016. "Technological capabilities, technological dynamism and innovation offshoring," ZEW Discussion Papers 16-044, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    8. Castellani, Davide & Montresor, Sandro & Schubert, Torben & Vezzani, Antonio, 2017. "Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide," International Business Review, Elsevier, vol. 26(3), pages 405-416.
    9. repec:pal:jintbs:v:49:y:2018:i:1:d:10.1057_s41267-017-0101-0 is not listed on IDEAS

    More about this item

    Keywords

    Internationalization; Offshoring; Innovation; Organizational Adaptation; Organizational Adaptability;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • 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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