Innovation, Development, and Outsourcing Across National Borders

Eiichi Tomiura

Chapter Chapter 7 in Cross-Border Outsourcing and Boundaries of Japanese Firms, 2018, pp 129-155 from Springer

Abstract: Abstract This chapter investigates innovation by outsourcing firms. The motivations for this topic choice are twofold. First, innovation is a critical factor determining productivity, specifically Total Factor Productivity. As innovative firms tend to be productive, they are likely to have ample capacity to be active in global activities, including foreign outsourcing. Second, innovativeness of firms is likely to determine barriers to foreign outsourcing. Firms may find it unsafe or difficult to outsource technologically complex tasks across national borders. The study of R&D by Japanese firmsJapanese firms is useful even from a global perspective, as Japan is the third largest country in the world in terms of R&D expenditure following the U.S. and China, and records large surplus of trade in technology only next to the U.S., according to the annual report of the Survey of Research and Development by Statistics Bureau, Japan’s Ministry of Internal Affairs. Bearing in mind these issues, we discuss how foreign outsourcing firms differ in their innovativeness from non-outsourcing and domestic outsourcing firms. Third, as firms in developed countries normally outsource production to developing countries, cross-border outsourcing is intrinsically connected to development stage differences across countries in the world. The main issue in the third context includes whether innovative firms outsource their production to developing countries. While firms can outsource any activities including R&D activities, outsourcing of R&D is rare possibly due to the fact that output of R&D is inherently hard to measure or be verifiable. Therefore, we do not discuss the outsourcing of innovation itself, as less than 4% of the firms in the RIETI survey outsource R&D across national borders.

Keywords: Foreign Outsourcing; Cross-border Outsourcing; FDIForeign Direct Investment (FDI); TFP Total Factor Productivity (TFP); sourcingSourcing (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advchp:978-981-13-0035-6_7

Ordering information: This item can be ordered from
http://www.springer.com/9789811300356

DOI: 10.1007/978-981-13-0035-6_7

Access Statistics for this chapter

More chapters in Advances in Japanese Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().