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The effects of production offshoring on R&D and innovation in the home country

: Dachs, Bernhard; Ebersberger, Bernd; Kinkel, Steffen; Som, Oliver

Fulltext urn:nbn:de:0011-n-3672678 (229 KByte PDF)
MD5 Fingerprint: a805b759f5ad4d6aa7ef80e4685b1acc
Created on: 2.12.2015

Karlsruhe: Fraunhofer ISI, 2014, 28 pp.
Fraunhofer ISI Discussion Papers Innovation Systems and Policy Analysis, 39
Report, Electronic Publication
Fraunhofer ISI ()

We investigate the effects of production offshoring on the innovation activities of manufacturing firms in the home country. The analysis is based on a dataset of more than 3000 manufacturing firms from seven European countries. We find that off-shoring firms on average employ a higher share of R&D and design personnel, introduce new products more frequently to the market, and invest more frequently in advanced process technologies compared to non-offshoring firms. Concerns that offshoring may hurt innovation because of the lost links between production and product development are not supported by the evidence.