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 469: Offshoring and Innovation Capabilities: Evidence from Swedish Manufacturing
Christopher F Baum (), Hans Lööf (), Luis Perez () and Andreas Stephan ()
Additional contact information
Christopher F Baum: Boston College and DIW Berlin
Hans Lööf: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology
Luis Perez: University of Minnesota
Andreas Stephan: Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS)
Abstract: This paper examines the impact of global value chains on rms' innovation capabilities. Using the United Nations Broad Economic Categories (BEC) system to identify offshoring-related intermediate imports, we study contracting out production over the period 2001-2014 from about 7,000 mainly small Swedish manufacturing frms to six different destinations and test hypotheses on improvements and outcomes of innovation capabilities. Our empirical fndings show that the strategy to participate in global value chains increases frms' innovative capability regardless of frms' technology intensity. The results are robust to a wide set of controls and in line with predictions in recent models of directed technical change.
Keywords: Innovation Capabilities; Technical Change; Skill Premium; Panel Data
JEL-codes: C55; F14; L23; O22; O32
29 pages, June 1, 2018
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