The Record on R&D Outsourcing

27 Pages Posted: 3 Apr 2016 Last revised: 23 Mar 2019

See all articles by Anne Marie Knott

Anne Marie Knott

Washington University in St. Louis - John M. Olin Business School

Date Written: March 19, 2019

Abstract

A major trend over the past few decades is open innovation. Interestingly this trend coincides with a substantial decline in R&D productivity. This paper examines whether these trends are related. Looking at one form of open innovation (R&D outsourcing), I find it has increased 2050%. I further find it is unproductive -- it generates no increase in revenues. This result is robust to controls for the type of firms who outsource, and the type of projects they outsource. Moreover neither the productivity of outsourced R&D nor internal R&D has changed over time. This is encouraging. It suggests firms can restore their R&D productivity and by gradually insourcing R&D.

Keywords: R&D, outsourcing, productivity, growth, open innovation

JEL Classification: O32, L25

Suggested Citation

Knott, Anne Marie, The Record on R&D Outsourcing (March 19, 2019). US Census Bureau Center for Economic Studies Paper No. CES-WP- 16-19. Available at SSRN: https://ssrn.com/abstract=2756220 or http://dx.doi.org/10.2139/ssrn.2756220

Anne Marie Knott (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1156
St. Louis, MO 63130-4899
United States

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