The effects of production offshoring on R&D and innovation in the home country

Bernhard Dachs; Bernd Ebersberger; Steffen Kinkel; Oliver Som

We investigate the effects of production offshoring on the innovation activities of manufacturing firms in the home country. The analysis is based on a dataset of more than 3000 manufacturing firms from seven European countries. We find that offshoring firms on average employ a higher share of R&D and design personnel, introduce new products more frequently to the market, and invest more frequently in advanced process technologies compared to non-offshoring firms. Concerns that offshoring may hurt innovation because of the lost links between production and product development are not supported by the evidence.

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Year of publication:	2014
Authors:	Dachs, Bernhard ; Ebersberger, Bernd ; Kinkel, Steffen ; Som, Oliver
Publisher:	Karlsruhe : Fraunhofer ISI
Subject:	offshoring \| R&D \| home country effects \| investment \| product innovation \| process innovation \| Innovation \| Auslandsverlagerung \| Offshoring \| Investition \| Investment \| Multinationales Unternehmen \| Transnational corporation \| Industrie \| Manufacturing industries \| Produktentwicklung \| New product development \| Produktivität \| Productivity