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Outsourcing in Product Cycles
Author(s) -
Chu HsiaoLei
Publication year - 2015
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12181
Subject(s) - outsourcing , imitation , industrial organization , intellectual property , product (mathematics) , production (economics) , product innovation , business , subsidy , economics , microeconomics , marketing , market economy , computer science , mathematics , psychology , social psychology , geometry , operating system
Abstract In this quality‐ladder product‐cycle model, a production process consists of core research and development ( R&D ), complementary R&D and manufacturing; and there exist northern imitation, southern innovation, and outsourcing of complementary R&D as well as manufacturing from the N orth to the South. It is found that a policy to protect intellectual property rights or to subsidize R&D may reduce the aggregate rate of innovation. In addition, not every globalized production strategy is innovation‐improving.