Abstract
This paper examines the impact of the outsourcing of production on the volume and composition of the home country's research and development (R&D). 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.
| Original language | English |
|---|---|
| Pages (from-to) | 828-840 |
| Number of pages | 13 |
| Journal | Review of International Economics |
| Volume | 20 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 1 Sept 2012 |
ASJC Scopus subject areas
- Geography, Planning and Development
- Development
