IDEAS home Printed from https://ideas.repec.org/p/not/notgep/2019-08.html
   My bibliography  Save this paper

Asymmetric additionalities between R&D outsourcing locations

Author

Listed:
  • María García-Vega
  • Elena Huergo

Abstract

This paper empirically examines the additionalities or crowding-out effects of international and national outsourcing of R&D to generate innovation. Using a panel database of about 10,000 Spanish firms for the period 2005-2014, we show that there is asymmetry in the effectiveness of the combined adoption of R&D outsourcing locations. International R&D outsourcing re-inforces the effect of domestic R&D outsourcing. However, national outsourcing does not re-inforce international R&D outsourcing. We next explore sources of additionality. Property Right Theory (PRT) suggests that additionality is high when holdup problems are low. We therefore analyze two important situations where holdup problems are likely to be low: with public foreign providers and in sectors with low technological complexity. Consistent with PRT, our results suggest that additionality is stronger when R&D is acquired from public providers rather than from private providers. Moreover, we find additionality in sectors with medium or low R&D complexity. In sectors with high R&D complexity, domestic and international outsourcing are largely independent. These results also suggest that international R&D outsourcing does not undermine domestic R&D.

Suggested Citation

  • María García-Vega & Elena Huergo, 2019. "Asymmetric additionalities between R&D outsourcing locations," Discussion Papers 2019-08, University of Nottingham, GEP.
  • Handle: RePEc:not:notgep:2019-08
    as

    Download full text from publisher

    File URL: https://www.nottingham.ac.uk/gep/documents/papers/2019/2019-08.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Mohnen, Pierre & Roller, Lars-Hendrik, 2005. "Complementarities in innovation policy," European Economic Review, Elsevier, vol. 49(6), pages 1431-1450, August.
    2. Pol Antràs & Davin Chor, 2013. "Organizing the Global Value Chain," Econometrica, Econometric Society, vol. 81(6), pages 2127-2204, November.
    3. Head, Keith & Mayer, Thierry & Ries, John, 2009. "How remote is the offshoring threat?," European Economic Review, Elsevier, vol. 53(4), pages 429-444, May.
    4. Bruce Kogut & Udo Zander, 1992. "Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology," Organization Science, INFORMS, vol. 3(3), pages 383-397, August.
    5. Spulber, Daniel F., 2008. "Innovation and international trade in technology," Journal of Economic Theory, Elsevier, vol. 138(1), pages 1-20, January.
    6. Gregory Corcos & Delphine M. Irac & Giordano Mion & Thierry Verdier, 2013. "The Determinants of Intrafirm Trade: Evidence from French Firms," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 825-838, July.
    7. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters,in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87 World Scientific Publishing Co. Pte. Ltd..
    8. repec:bla:jomstd:v:47:y:2010:i:8:p:1483-1509 is not listed on IDEAS
    9. Marco Ceccagnoli & Matthew J. Higgins & Vincenzo Palermo, 2014. "Behind the Scenes: Sources of Complementarity in R&D," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(1), pages 125-148, March.
    10. Stiebale, Joel, 2016. "Cross-border M&As and innovative activity of acquiring and target firms," Journal of International Economics, Elsevier, vol. 99(C), pages 1-15.
    11. García-Vega, María & Huergo, Elena, 2019. "The role of international and domestic R&D outsourcing for firm innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 775-792.
    12. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, vol. 112(482), pages 854-893, October.
    13. Buss, Philipp & Peukert, Christian, 2015. "R&D outsourcing and intellectual property infringement," Research Policy, Elsevier, vol. 44(4), pages 977-989.
    14. Dirk Czarnitzki & Bernd Ebersberger & Andreas Fier, 2007. "The relationship between R&D collaboration, subsidies and R&D performance: Empirical evidence from Finland and Germany," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1347-1366.
    15. Holger Görg & Aoife Hanley, 2011. "Services Outsourcing And Innovation: An Empirical Investigation," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 321-333, April.
    16. Alberto Galasso & Mark Schankerman & Carlos J. Serrano, 2013. "Trading and enforcing patent rights," RAND Journal of Economics, RAND Corporation, vol. 44(2), pages 275-312, June.
    17. Dorothy E. Klotz & Kalyan Chatterjee, 1995. "Dual Sourcing in Repeated Procurement Competitions," Management Science, INFORMS, vol. 41(8), pages 1317-1327, August.
    18. Beneito, Pilar, 2006. "The innovative performance of in-house and contracted R&D in terms of patents and utility models," Research Policy, Elsevier, vol. 35(4), pages 502-517, May.
    19. Castellani, Davide & Pieri, Fabio, 2013. "R&D offshoring and the productivity growth of European regions," Research Policy, Elsevier, vol. 42(9), pages 1581-1594.
    20. Dirk Czarnitzki & Cindy Lopes-Bento, 2014. "Innovation Subsidies: Does the Funding Source Matter for Innovation Intensity and Performance? Empirical Evidence from Germany," Industry and Innovation, Taylor & Francis Journals, vol. 21(5), pages 380-409, July.
    21. Gene M. Grossman & Elhanan Helpman & Adam Szeidl, 2005. "Complementarities between Outsourcing and Foreign Sourcing," American Economic Review, American Economic Association, vol. 95(2), pages 19-24, May.
    22. Ashish Arora & Andrea Fosfuri & Alfonso Gambardella, 2004. "Markets for Technology: The Economics of Innovation and Corporate Strategy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511819.
    23. Dietmar Harhoff & Elisabeth Mueller & John Reenen, 2014. "What are the Channels for Technology Sourcing? Panel Data Evidence from German Companies," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(1), pages 204-224, March.
    24. repec:spr:epolit:v:35:y:2018:i:2:d:10.1007_s40888-018-0100-z is not listed on IDEAS
    25. Spithoven, André & Teirlinck, Peter, 2015. "Internal capabilities, network resources and appropriation mechanisms as determinants of R&D outsourcing," Research Policy, Elsevier, vol. 44(3), pages 711-725.
    26. repec:bla:stratm:v:39:y:2018:i:9:p:2517-2546 is not listed on IDEAS
    27. Ennen, Edgar & Richter, Ansgar, 2009. "The Whole Is More Than the Sum of Its Parts - Or Is It? A Review of the Empirical Literature on Complementarities in Organizations," MPRA Paper 15666, University Library of Munich, Germany.
    28. Galasso, Alberto & Schankerman, Mark & Serrano, Carlos J., 2013. "Trading and enforcing patent rights," LSE Research Online Documents on Economics 51080, London School of Economics and Political Science, LSE Library.
    29. Escribano, Alvaro & Fosfuri, Andrea & Tribó, Josep A., 2009. "Managing external knowledge flows: The moderating role of absorptive capacity," Research Policy, Elsevier, vol. 38(1), pages 96-105, February.
    30. repec:bla:stratm:v:24:y:2003:i:4:p:293-316 is not listed on IDEAS
    31. Huergo, Elena & Moreno, Lourdes, 2017. "Subsidies or loans? Evaluating the impact of R&D support programmes," Research Policy, Elsevier, vol. 46(7), pages 1198-1214.
    32. Ajay Agrawal & Iain Cockburn & Laurina Zhang, 2015. "Deals not done: Sources of failure in the market for ideas," Strategic Management Journal, Wiley Blackwell, vol. 36(7), pages 976-986, July.
    33. Cuihong Li, 2013. "Sourcing for Supplier Effort and Competition: Design of the Supply Base and Pricing Mechanism," Management Science, INFORMS, vol. 59(6), pages 1389-1406, June.
    34. Laura Abramovsky & Rachel Griffith, 2006. "Outsourcing and Offshoring of Business Services: How Important is ICT?," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 594-601, 04-05.
    35. Tomiura, Eiichi, 2009. "Foreign versus domestic outsourcing: Firm-level evidence on the role of technology," International Review of Economics & Finance, Elsevier, vol. 18(2), pages 219-226, March.
    36. 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.
    37. Sharon Belenzon & Mark Schankerman, 2010. "Spreading the Word: Geography, Policy and Knowledge Spillovers," CEP Discussion Papers dp1005, Centre for Economic Performance, LSE.
    38. Luis Garicano & Yanhui Wu, 2012. "Knowledge, Communication, and Organizational Capabilities," Organization Science, INFORMS, vol. 23(5), pages 1382-1397, October.
    39. Aaron K. Chatterji & Kira R. Fabrizio, 2016. "Does the market for ideas influence the rate and direction of innovative activity? Evidence from the medical device industry," Strategic Management Journal, Wiley Blackwell, vol. 37(3), pages 447-465, March.
    40. 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.
    41. repec:bla:stratm:v:29:y:2008:i:11:p:1207-1224 is not listed on IDEAS
    42. Dolores Añón Higón & Juan A. Máñez & Juan A. Sanchis-Llopis, 2018. "Intramural and external R&D: evidence for complementarity or substitutability," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(2), pages 555-577, August.
    43. Liu, Rebecca & Rammer, Christian, 2016. "The contribution of different public innovation funding programs to SMEs' export performance," ZEW Discussion Papers 16-078, ZEW - Leibniz Centre for European Economic Research.
    44. Arora, Ashish & Gambardella, Alfonso, 1990. "Complementarity and External Linkages: The Strategies of the Large Firms in Biotechnology," Journal of Industrial Economics, Wiley Blackwell, vol. 38(4), pages 361-379, June.
    45. Albert G. Z. Hu & Gary H. Jefferson & Qian Jinchang, 2005. "R&D and Technology Transfer: Firm-Level Evidence from Chinese Industry," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 780-786, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Imports of technology; International and national R&D outsourcing; Innovation; Additionality or crowding-out effects. JEL classification: L25; O31; O32;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • 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

    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:not:notgep:2019-08. 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: (Hilary Hughes). General contact details of provider: http://edirc.repec.org/data/cgnotuk.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 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.

    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.