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Domestic R&D and offshoring: does offshoring reduce knowledge production?

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  • Martin Junge
  • Anders Sørensen

Abstract

An important question in industrialized countries is whether offshoring activities reduce the probability of performing own research and development (R&D) or whether the R&D intensity falls in firms that already have R&D activities. This question is addressed using a unique data set that combines survey and register data. No evidence is found for a lower probability of own R&D after offshoring takes place compared to before. Moreover, offshoring does not lead to lower R&D intensity in general. However, firms that offshore R&D activity have larger R&D intensity after offshoring has taken place, which suggests that R&D performed at home is complementary to foreign R&D.

Suggested Citation

  • Martin Junge & Anders Sørensen, 2018. "Domestic R&D and offshoring: does offshoring reduce knowledge production?," Applied Economics Letters, Taylor & Francis Journals, vol. 25(18), pages 1283-1287, October.
    • Handle: RePEc:taf:apeclt:v:25:y:2018:i:18:p:1283-1287
    DOI: 10.1080/13504851.2017.1418068
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