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

Abstract: We examine the impact of offshoring on patenting and total factor productivity using a panel of 7,000 mainly small Swedish manufacturing firms over the period 2001-2014. We apply the United Nations Broad Economic Categories (BEC)system to identify offshoring-related intermediate imports. The results show that the link between offshoring on the one hand and innovation and productivity on the other is largely explained by self-selection and reverse causality. We find a positive but statistically weak impact of offshoring on innovation, and no effect on productivity.

Keywords: offshoring; patent; trademark; innovation; productivity; panel data

JEL-codes: C33; D24; F61; L23; O31

29 pages, August 3, 2020

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