Dachs, Bernhard Ebersberger, Bernd Kinkel, Steffen Som, Oliver
Year of Publication:
Fraunhofer ISI Discussion Papers Innovation Systems and Policy Analysis 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