R&D offshoring and the productivity growth of European regions

The recent increase in R&D offshoring has raised fears that knowledge and competitiveness in advanced countries may be at risk of ‘hollowing out’. At the same time, economic research has stressed that this process is also likely to allow some reverse technology transfer and foster growth at home. This paper addresses this issue by investigating the extent to which R&D offshoring is associated with productivity dynamics of European regions. We find that offshoring regions have higher productivity growth, but this positive effect fades with the number of investment projects carried out abroad. A large and positive correlation emerges between the extent of R&D offshoring and the home region productivity growth, supporting the idea that carrying out R&D abroad strengthens European competitiveness.

Can we really trust offshoring indices?

This paper argues that offshoring indices often measure something different than what we think they are. Using data from input-output tables of 21 European countries from 1995 to 2006 we decompose an offshoring index, distinguishing between a domestic (structural change) and an international component (imported inputs ratio). Regarding offshoring of business services, a large share of the index variation is driven by the domestic component. This is even more pronounced for overall service offshoring. In the case of material offshoring, by contrast, the international component drives the main variation of the indices. Our results therefore show that, regarding (business) services, the typical calculation of offshoring indices tends to over estimate the role of the imported inputs component, neglecting the role played by structural changes in the economy.

Technology sourcing, knowledge management and governance in international inter-organizational innovation networks

This conceptual paper aims to improve our understanding of how internationalised firms use outsourcing and offshoring strategies to manage knowledge and information through the life-cycle of integrated product-service solutions. More precisely, we identify the appropriate theoretical framework for this analysis and investigate through in-depth case studies how UK engineering firms organise, coordinate, and incentivise work that is executed in globally distributed teams. Our research focuses on their UK and India offices to study the organisation and governance of distributed teams. The research has several theoretical dimensions - organization; geography; time and knowledge - that it addresses as boundary challenges.

Economic analysis of international supply chains: an internalization perspective

Offshoring and outsourcing in global value chains have been extensively analyzed from a strategic management perspective (Gereffi & Li, 2012; Gereffi, Humphrey & Sturgeon, 2005; Mudambi & Venzin, 2010). This paper examines these issues from an internalization theory perspective by summarizing the contribution of internalization theory to supply chain analysis; considering how a division of labor is coordinated and comparing coordination by management with coordination by the market; and discussing the formal models of supply chains developed by economists. Supply chain researchers possessing an interest in economic principles and good mathematical skills can make an important contribution to internalization theory, and it is hoped that this paper will encourage them to do so.