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.

Citation

García-Vega, M., & Huergo, E. (2019). The role of international and domestic R&D outsourcing for firm innovation. Journal of Economic Behavior and Organization, 157, 775-792. https://doi.org/10.1016/j.jebo.2018.11.009

• Journal Article Type: Article
• Acceptance Date: Nov 8, 2018
• Online Publication Date: Nov 24, 2018
• Publication Date: 2019-01
• Deposit Date: Nov 12, 2018
• Publicly Available Date: May 25, 2020
• Journal: Journal of Economic Behavior & Organization
• Print ISSN: 0167-2681
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 157
• Pages: 775-792
• DOI: https://doi.org/10.1016/j.jebo.2018.11.009
• Keywords: R&D outsourcing; transaction cost economics; innovation; international versus domestic outsourcing; exporters JEL classification: L25; O32
• Public URL: https://nottingham-repository.worktribe.com/output/1243371
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0167268118303056
• Additional Information: This article is maintained by: Elsevier; Article Title: The role of international and domestic R&D outsourcing for firm innovation; Journal Title: Journal of Economic Behavior & Organization; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.jebo.2018.11.009; Content Type: article; Copyright: © 2018 Elsevier B.V. All rights reserved.