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Offshoring and Home Country R&D
Author(s) -
Karpaty Patrik,
Tingvall Patrik Gustavsson
Publication year - 2015
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12226
Subject(s) - offshoring , productivity , economics , labour economics , demographic economics , business , outsourcing , economic growth , marketing
National concerns are occasionally raised against offshoring economic activities to other countries. While most of the existing literature has focused on the effects on labour demand and productivity, the effects on domestic R & D have largely been neglected. Using Swedish firm‐level data, we analyse the effects of material offshoring on the R & D intensity of domestic firms. The results suggest that the overall impact of offshoring on R & D is negative. The negative effect on home country R & D stems from offshoring by small firms from other high‐income countries. Conversely, offshoring increases home country R & D among large firms. As large firms perform the bulk of Swedish R & D , the net effect of offshoring on R & D is positive.