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Innovation and the International Firm Structure: Theory and Evidence from German Firm-Level Data

  • Hansen, Thorsten
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    This paper studies the impact of innovation on the organizational structure. The theoretical framework predicts that a larger parental pool of knowledge raises the probability of oshoring. This holds in a national as well as an international context. However, when the producer loses territorial protection, the changeover from non-integration to integration is delayed. Employing data on German rms investing in Eastern Europe nds empirical evidence for the theoretical predictions. The results are robust to dierent measurements and an instrumental variable regression.

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    File URL: http://epub.ub.uni-muenchen.de/11464/1/Innovation_TH_MDP.pdf
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    Paper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 11464.

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    Date of creation: Apr 2010
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    Handle: RePEc:lmu:muenec:11464
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    1. Acemoglu, Daron & Aghion, Philippe & Griffith, Rachel & Zilibotti, Fabrizio, 2005. "Vertical Integration and Technology: Theory and Evidence," CEPR Discussion Papers 5258, C.E.P.R. Discussion Papers.
    2. Teece, David J., 1986. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 15(6), pages 285-305, December.
    3. Gamal Atallah, 2002. "Production Technology, Information Technology, and Vertical Integration under Asymmetric Information," CIRANO Working Papers 2002s-32, CIRANO.
    4. Grossman, Sanford J & Hart, Oliver, 1985. "The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration," CEPR Discussion Papers 70, C.E.P.R. Discussion Papers.
    5. Mugele, Christian & Schnitzer, Monika, 2006. "Organization of Multinational Activities and Ownership Structure," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 98, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    6. Ann Bartel & Saul Lach & Nachum Sicherman, 2005. "Outsourcing and Technological Change," NBER Working Papers 11158, National Bureau of Economic Research, Inc.
    7. Sharon Belenzon & Tomer Berkovitz, 2010. "Innovation in Business Groups," Management Science, INFORMS, vol. 56(3), pages 519-535, March.
    8. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation, and Productivity: An Econometric Analysis at the Firm Level," NBER Working Papers 6696, National Bureau of Economic Research, Inc.
    9. Helen Louri & Raymond Loufir & Marina Papanastassiou, 2002. "Foreign Investment and Ownership Structure: An Empirical Analysis," Empirica, Springer, vol. 29(1), pages 31-45, March.
    10. Peter Maskell & Torben Pedersen & Bent Petersen & Jens Dick-Nielsen, 2005. "Learning Paths to Offshore Outsourcing - From Cost Reduction to Knowledge Seeking," DRUID Working Papers 05-17, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    11. Kenneth E. Knight, 1967. "A Descriptive Model of the Intra-Firm Innovation Process," The Journal of Business, University of Chicago Press, vol. 40, pages 478.
    12. Aghion, Philippe & Tirole, Jean, 1994. "Formal and Real Authority in Organizations," IDEI Working Papers 37, Institut d'Économie Industrielle (IDEI), Toulouse.
    13. Sharon Belenzon & Tomer Berkovitz, 2007. "Innovation in Business Groups," Economics Series Working Papers 368, University of Oxford, Department of Economics.
    14. Christine Greenhalgh & Mark Rogers, 2007. "The value of intellectual property rights to firms and society," Oxford Review of Economic Policy, Oxford University Press, vol. 23(4), pages 541-567, Winter.
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    16. Antras, Pol & Helpman, Elhanan, 2004. "Global Sourcing," Scholarly Articles 3196327, Harvard University Department of Economics.
    17. Hart, Oliver D. & Moore, John, 1990. "Property Rights and the Nature of the Firm," Scholarly Articles 3448675, Harvard University Department of Economics.
    18. Hall, Bronwyn H & Ziedonis, Rosemarie Ham, 2001. "The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 101-28, Spring.
    19. Marin, Dalia, 2005. "A New International Division of Labor in Europe: Outsourcing and Offshoring to Eastern Europe," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 80, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    20. George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59, pages 185.
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    23. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc.
    24. repec:hrv:faseco:4784029 is not listed on IDEAS
    25. Gene M. Grossman & Elhanan Helpman, 2002. "Integration Versus Outsourcing In Industry Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 85-120, February.
    26. Amemiya, Takeshi, 1981. "Qualitative Response Models: A Survey," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1483-1536, December.
    27. Mol, Michael J. & Pauwels, Pieter & Matthyssens, Paul & Quintens, Lieven, 2004. "A technological contingency perspective on the depth and scope of international outsourcing," Journal of International Management, Elsevier, vol. 10(2), pages 287-305.
    28. repec:fth:harver:1473 is not listed on IDEAS
    29. Glass, Amy Jocelyn & Saggi, Kamal, 2001. "Innovation and wage effects of international outsourcing," European Economic Review, Elsevier, vol. 45(1), pages 67-86, January.
    30. Kirk Monteverde, 1995. "Technical Dialog as an Incentive for Vertical Integration in the Semiconductor Industry," Management Science, INFORMS, vol. 41(10), pages 1624-1638, October.
    31. John McLaren, 2000. ""Globalization" and Vertical Structure," American Economic Review, American Economic Association, vol. 90(5), pages 1239-1254, December.
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