R&D offshore insourcing in Portugal: drivers and motivations

Cátia Pinheiro () and Paula Sarmento ()
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Cátia Pinheiro: Faculty of Economics of University of Porto
Paula Sarmento: CEF.UP and Faculty of Economics of University of Porto

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: As the global economy becomes more integrated, the international fragmentation of the value chain activities becomes regular. Despite the recent wave of domestic and cross-border vertical disintegration, vertical integration of R&D remains a decision for some firms. The aim of this paper is to assess the main drivers and motivations for multinational firms to engage in R&D international insourcing, specifically selecting Portugal as the host location. Although transaction costs and resource-based view of the firm provide useful insights about the decision whether or not to integrate, we intend to assess the extent to which location specific features contribute for that decision. The main purpose is to understand if this location, i.e., Portugal, presents any unique features which may lead these firms to internally carry out R&D activities. Our results suggest that multinational firms tend to keep R&D activities in-house mainly because of costs and uncertainty issues and that Portugal was selected as location to set R&D both because of a market-oriented as well as technology-oriented strategy.

Keywords: outsourcing; offshoring; R&D; Home base exploiting; Home base augmenting (search for similar items in EconPapers)
JEL-codes: D23 F15 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2013-09
New Economics Papers: this item is included in nep-cse, nep-ino and nep-sbm
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