Following the Money in the New Bifurcated American Economy: Profit Reinvestment in the Global Value Chains

Abstract:     
Our interest in writing this article is to create a bridge between the scholarly and academic research on technological innovation and a private sector, for-profit business model that implements the ideas on innovation and entrepreneurship, primarily in metro regional economies.

In this article we address the impact that a new form of economic bifurcation between firms that are connected to global markets, primarily multinational corporations, and firms that are not connected to global markets is having on regional rates of innovation.

We conclude that a recent trend in off-shoring research and development in the larger corporations has had a negative economic effect on the rates of regional innovation, primarily in the regional intermediate demand markets that formerly supplied inputs to the innovation process at the larger corporations.

Number of Pages in PDF File: 10

Keywords: Industrial value chains, global value chains, b-to-b supply chains, innovation

JEL Classification: M13, O32, R15, R58

working papers series