The role of international and domestic R&D outsourcing for firm innovation



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García Vega, María and Huergo, Elena (2019) The role of international and domestic R&D outsourcing for firm innovation. Journal of Economic Behavior and Organization, 157 . pp. 775-792. ISSN 0167-2681

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Firms are increasingly outsourcing their high-tech services. Theory suggests that R&D outsourcing allows firms to specialize in core knowledge-intensive tasks, thereby increasing innovation, but R&D outsourcing may also undermine internal capabilities. Our goal is to empirically assess the relative importance of these two possibilities, distinguishing between national and international R&D outsourcing and firms’ exporting status. We examine R&D purchases of more than 10,000 Spanish firms for the period 2004-2014. We show that R&D outsourcing improves firm innovation. Product innovation rises mostly with domestic outsourcing, while process innovation increases with both domestic and international R&D outsourcing. In addition, we find that international outsourcing provides an extra premium, mostly for exporters. Our results contribute to a better understanding of how firms organize the production of knowledge and innovation.

Item Type:Article
Uncontrolled Keywords:R&D outsourcing; Transaction cost economics; Innovation; International versus domestic outsourcing; Exporters
Subjects:Social sciences > Economics > Economic development
Social sciences > Economics > Business enterprises
Social sciences > Economics > Industrial organization
JEL:L25, O32
ID Code:60665
Deposited On:27 May 2020 08:36
Last Modified:27 May 2020 09:16

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