Firm R&D units and outsourcing partners: A matching story

Andrés Barge-Gil and Annamaria Conti

MPRA Paper from University Library of Munich, Germany

Abstract: We present a theory that examines the optimal match between firm R&D units and external partners for projects that involve problem solving. We have a firm selecting an external partner conditional on the learning costs of its internal R&D unit. We show that there exists a matching equilibrium with property that external partners with low learning costs for a project work with R\&D units that also have low learning costs for the same project. Empirically, we use a dataset of Spanish R\&D firms and relate their share of R&D outsourcing to universities to the composition of their R&D units, described by the presence of staff with a PhD. Our main finding is that, controlling for endogeneity, firms that employ R\&D staff with a PhD outsource relatively more to universities than to firms. We interpret this result as evidence that R&D units with relatively low learning costs for basic projects tend to match with external partners, universities, with relatively low learning costs for the same projects.

Keywords: Firm R&D Units; Outsourcing; External Partners; Optimal Matching (search for similar items in EconPapers)
JEL-codes: D23 L24 O32 (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-com, nep-cse, nep-ino, nep-knm, nep-ppm and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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