Outsourcing: Volume and Composition of R&D

13 Pages Posted: 24 Aug 2012

See all articles by Hamid Beladi

Hamid Beladi

University of Texas at San Antonio - College of Business - Department of Economics

Sugata Marjit

Centre for Studies in Social Sciences, Calcutta; Indian Institute of Foreign Trade; City University of Hong Kong (CityU) - Department of Economics & Finance

Lei Yang

Hong Kong Polytechnic University

Multiple version iconThere are 3 versions of this paper

Date Written: September 2012

Abstract

This paper examines the impact of the outsourcing of production on the volume and composition of the home country's research and development (R&D). We find that outsourcing decreases the process R&D of the multinational firm in large markets when it only conducts process R&D (the substitution effect between outsourcing and process R&D). Outsourcing tends to emerge as a complementary factor to product development when the multinational firm conducts both product R&D and process R&D (the complementary effect between outsourcing and product R&D) under some conditions. This implies that international outsourcing has a different effect on product innovation and process innovation.

Suggested Citation

Beladi, Hamid and Marjit, Sugata and Marjit, Sugata and Yang, Lei, Outsourcing: Volume and Composition of R&D (September 2012). Review of International Economics, Vol. 20, Issue 4, pp. 828-840, 2012, Available at SSRN: https://ssrn.com/abstract=2135373 or http://dx.doi.org/10.1111/j.1467-9396.2012.01058.x

Hamid Beladi (Contact Author)

University of Texas at San Antonio - College of Business - Department of Economics ( email )

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Sugata Marjit

Centre for Studies in Social Sciences, Calcutta ( email )

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Kolkata, West Bengal, India
Kolkata, West Bengal 700094
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Indian Institute of Foreign Trade ( email )

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City University of Hong Kong (CityU) - Department of Economics & Finance ( email )

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Lei Yang

Hong Kong Polytechnic University ( email )

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Hong Kong
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