Domestic R&D and offshoring: does offshoring reduce knowledge production?

Martin Junge and Anders Sørensen

Applied Economics Letters, 2018, vol. 25, issue 18, 1283-1287

Abstract: An important question in industrialized countries is whether offshoring activities reduce the probability of performing own research and development (R&D) or whether the R&D intensity falls in firms that already have R&D activities. This question is addressed using a unique data set that combines survey and register data. No evidence is found for a lower probability of own R&D after offshoring takes place compared to before. Moreover, offshoring does not lead to lower R&D intensity in general. However, firms that offshore R&D activity have larger R&D intensity after offshoring has taken place, which suggests that R&D performed at home is complementary to foreign R&D.

Date: 2018
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DOI: 10.1080/13504851.2017.1418068

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