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Offshoring and Innovation Capabilities: Evidence from Swedish Manufacturing

Christopher Baum (), Hans Lööf (), Luis Perez and Andreas Stephan ()

No 469, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: This paper examines the impact of global value chains on rms' innovation capabilities. Using the United Nations Broad Economic Categories (BEC) system to identify offshoring-related intermediate imports, we study contracting out production over the period 2001-2014 from about 7,000 mainly small Swedish manufacturing frms to six different destinations and test hypotheses on improvements and outcomes of innovation capabilities. Our empirical fndings show that the strategy to participate in global value chains increases frms' innovative capability regardless of frms' technology intensity. The results are robust to a wide set of controls and in line with predictions in recent models of directed technical change.

Keywords: Innovation Capabilities; Technical Change; Skill Premium; Panel Data (search for similar items in EconPapers)
JEL-codes: C55 F14 L23 O22 O32 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2018-06-01
New Economics Papers: this item is included in nep-ino, nep-int and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:cesisp:0469

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