@article { , title = {The role of international and domestic R\&D outsourcing for firm innovation}, abstract = {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.}, doi = {10.1016/j.jebo.2018.11.009}, issn = {0167-2681}, journal = {Journal of Economic Behavior \& Organization}, note = {18 mo. embargo. OL 12.11.2018}, pages = {775-792}, publicationstatus = {Published}, publisher = {Elsevier}, url = {https://nottingham-repository.worktribe.com/output/1243371}, volume = {157}, keyword = {R&D outsourcing, transaction cost economics, innovation, international versus domestic outsourcing, exporters JEL classification: L25, O32}, year = {2019}, author = {García-Vega, María and Huergo, Elena} }