Outsourcing: Volume and Composition of R&D

Hamid Beladi, Sugata Marjit and Lei Yang
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Lei Yang: The Hong Kong Polytechnic University

No 1, Working Papers from College of Business, University of Texas at San Antonio

Abstract: This paper examines the impact of the outsourcing of production on the volume and composition of the home country’s research and development. We find that outsourcing decreases the process R&D of the multinational firm in large markets when it only conducts process R&D (the substitution effect between outsourcing and process R&D). Outsourcing tends to emerge as a complementary factor to product development when the multinational firm conducts both product R&D and process R&D (the complementary effect between outsourcing and product R&D) under some conditions. This implies that international outsourcing has a different effect on product innovation and process innovation.

Keywords: Outsourcing; Product R&D; Process R&D (search for similar items in EconPapers)
JEL-codes: D23 F12 L22 O31 O33 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2011-02-11
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Journal Article: Outsourcing: Volume and Composition of R&D (2012)
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