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Outsourcing: Volume and Composition of R&D


  • Hamid Beladi

    (University of Texas at San Antonio)

  • Sugata Marjit

    (Centre for Studies in Social Sciences)

  • Lei Yang

    (The Hong Kong Polytechnic University)


This paper examines the impact of the outsourcing of production on the volume and composition of the home country’s research and development. We find that outsourcing decreases the process R&D of the multinational firm in large markets when it only conducts process R&D (the substitution effect between outsourcing and process R&D). Outsourcing tends to emerge as a complementary factor to product development when the multinational firm conducts both product R&D and process R&D (the complementary effect between outsourcing and product R&D) under some conditions. This implies that international outsourcing has a different effect on product innovation and process innovation.

Suggested Citation

  • Hamid Beladi & Sugata Marjit & Lei Yang, "undated". "Outsourcing: Volume and Composition of R&D," Working Papers 0001, College of Business, University of Texas at San Antonio.
  • Handle: RePEc:tsa:wpaper:0001

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    References listed on IDEAS

    1. Dei, Fumio, 1985. "Voluntary export restraints and foreign investment," Journal of International Economics, Elsevier, vol. 19(3-4), pages 305-312, November.
    2. Panos Hatzipanayotou & Sajal Lahiri & Michael S. Michael, 2002. "Can cross-border pollution reduce pollution?," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 805-818, November.
    3. Yohe, Gary W., 1979. "The backward incidence of pollution control--some comparative statics in general equilibrium," Journal of Environmental Economics and Management, Elsevier, vol. 6(3), pages 187-198, September.
    4. Batra, Raveendra N, 1984. "Non-traded Goods and the Metzler-Paradox: A Comment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(3), pages 763-767, October.
    5. Batra, Raveendra N, 1973. "Nontraded Goods, Factor Market Distortions, and the Gains from Trade," American Economic Review, American Economic Association, vol. 63(4), pages 706-713, September.
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    More about this item


    Outsourcing; Product R&D; Process R&D;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes


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