Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/88695
Authors: 
Baier, Elisabeth
Rammer, Christian
Schuber, Torben
Year of Publication: 
2013
Series/Report no.: 
ZEW Discussion Papers 13-109
Abstract: 
We analyze the effects of captive off-shoring of innovation activities on the firms' ability to adapt their organizational processes and structures. Starting from complexity theory, we use three consecutive waves of the German part of the Community Innovation Survey to test our hypotheses. We find an inverted u-shape of innovation off-shoring on the effectiveness of organizational adaptability, implying an optimal threshold value of innovation off-shoring. This value is 11% for share of off-shored R&D, 15% for downstream innovation activities such as local market adaptation, and 34% for design activities. We also analyze several contingency variables. In particular we show that the costs of innovation off-shoring in terms of reduced organizational adaptability are exacerbated by a strong focus on R&D and a strong embeddedness in on-shore networks. Smaller firms find it easier to deal with the management complexity induced by geographical dispersion of innovation activities because of their greater flexibility.
Subjects: 
Internationalization
Off-Shoring
Innovation
R&D
Organizational Adaptation
Organizational Adaptability
JEL: 
O32
M16
L23
L25
Document Type: 
Working Paper

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