Domestic R&D Employment Effects of Offshoring R&D Tasks: Some Empirical Evidence from Finland

Ali-Yrkkö, Jyrki and Matthias Deschryvere

No 1163, Discussion Papers from The Research Institute of the Finnish Economy

Abstract: ABSTRACT : This study empirically explores whether R&D offshoring affects the domestic R&D employment at the firm level. Overall, the Finnish survey data suggest that the impact of R&D internationalization on domestic R&D employment depends on the mode of internationalization (in-house offshoring vs. offshore outsourcing vs. in-house expansion of R&D abroad). Moreover, manufacturing and service firms are found to be different when it comes to R&D internationalization and its domestic employment effects. In the manufacturing sector, especially in-house offshoring of R&D has a significant negative impact on the plan to increase R&D employment. But the relationship between the in-house expansion of R&D abroad and domestic R&D employment turns out to be complementary. In the service sector, it is in the first place offshore outsourcing of R&D that has a significant negative impact on the plan to increase R&D employment. A final result supports the view that R&D does not always follow production but that a strong location link between production and R&D does have a significant negative effect on the domestic R&D employment.

Keywords: globalization; internationalization; outsourcing; offshoring; job loss; R&D; spillovers; research; relocation; domestic; home-country (search for similar items in EconPapers)
JEL-codes: J6 J3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-ino, nep-lab and nep-mic
Date: 2008-11-06
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Persistent link: http://EconPapers.repec.org/RePEc:rif:dpaper:1163

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