Dachs, Bernhard Ebersberger, Bernd Kinkel, Steffen Som, Oliver
Year of Publication:
Fraunhofer ISI Discussion Papers - Innovation Systems and Policy Analysis No. 39
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 offshoring 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.
offshoring R&D home country effects investment product innovation process innovation