Foreign outsourcing and the product cycle: evidence from micro data

Eiichi Tomiura

Applied Economics Letters, 2008, vol. 15, issue 13, 1019-1022

Abstract: This article provides empirical evidence on the product cycle and the firm's make-or-buy decision by using a firm-level data set with a direct measure of foreign outsourcing. Across industries, foreign outsourcing tends to be inactive in R&D-intensive industries. Within each industry, products exported from the home country are on average significantly more R&D intensive than those outsourced to independent foreign firms. Products manufactured within subsidiaries at South tend to have medium R&D intensity. This ordering in R&D intensity is consistent with the theoretical prediction.

Date: 2008
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DOI: 10.1080/13504850600972360

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