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R&D offshoring and home industry productivity

Gaétan de Rassenfosse and Russell Thomson ()

Working Papers from Chair of Science, Technology, and Innovation Policy

Abstract: Offshoring R&D commonly invokes concerns regarding the loss of high value jobs and a hollowing out of technological capabilities, but it can also benefit domestic firms by enabling them to tap into the global technological frontier. We study the effect of R&D offshoring on industrial productivity in the home country using industry-level data for 18 OECD countries over a 26-year period. Simultaneity between productivity and R&D offshoring is addressed by using foreign tax policy as an instrument for offshored R&D. We show that R&D offshoring contributes positively to productivity in the home country, irrespective of the host country destination.

Keywords: R&D offshoring; globalization; productivity; foreign R&D (search for similar items in EconPapers)
JEL-codes: F23 F62 L6 O25 O33 O47 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2018-12
New Economics Papers: this item is included in nep-eff, nep-ino, nep-int and nep-tid
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