Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 439: Offshoring R&D

Joonas Tuhkuri (), Hans Lööf (), Ali Mohammadi () and Petri Rouvinen ()
Additional contact information
Joonas Tuhkuri: ETLA, The Research Institute of the Finnish Economy, Helsinki, Finland
Hans Lööf: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology
Ali Mohammadi: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology
Petri Rouvinen: ETLA, The Research Institute of the Finnish Economy, Helsinki, Finland

Abstract: This paper explores offshoring of firms’ research and development functions. Our analysis employs a previously untapped and unique Eurostat International Sourcing Survey. The results are easy to summarize. First, the magnitude of R&D offshoring is small. Second, a large majority of R&D is offshored within the en-terprise group, in contrast to offshoring outside of the enterprise group. Third, most of R&D offshoring from Europe is directed to high-income European countries, not so to low-cost countries in Europe, China, or India. Fourth, R&D jobs do have been lost from offshoring; however, the negative employment impact has been moderate. But the Eurostat International Sourcing Survey does not allow entangling the full net employment effect of R&D offshoring, which could be either negative or positive.

Keywords: R&D; offshoring; outsourcing; innovation; product development

JEL-codes: F00; F16; F23; J44; L22; O32; O33

13 pages, May 12, 2016

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