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Manage the value and liability of offshoring innovation

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  • Hung, Tung Min
  • Contractor, Farok
  • Lo, Yi-Ju

Abstract

The impact of offshoring innovation on firm innovativeness remains unclear. To bridge this gap, we draw upon the new eclectic paradigm and the strategy structure paradigm to examine offshoring innovation, a combination of geographical dispersion and functional interdependence of various innovation activities. We also explore the sole and joint effects of two managing mechanisms – a global offshoring strategy and captive operations – on the relationship between offshoring innovation and firm innovativeness. As offshoring innovation has positive impact on firm innovativeness, each mechanism helps firms appropriate the value of offshoring innovation. Despite that, the joint adoption of both mechanisms exerts a greater impact of offshoring innovation on firm innovativeness than does sole one.

Suggested Citation

  • Hung, Tung Min & Contractor, Farok & Lo, Yi-Ju, 2022. "Manage the value and liability of offshoring innovation," International Business Review, Elsevier, vol. 31(2).
    • Handle: RePEc:eee:iburev:v:31:y:2022:i:2:s0969593121001414
    DOI: 10.1016/j.ibusrev.2021.101923
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