Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 180: Offshoring and Home Country R&D

Patrik Tingvall () and Patrik Karpaty ()
Additional contact information
Patrik Tingvall: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Patrik Karpaty: Örebro University, Postal: Örebro University , 701 82 Örebro, Sweden

Abstract: National concerns are sometimes raised against offshoring of economic activities to other countries. While most of the existing literature has focused on the effects on labor demand and productivity the effects on domestic R&D have been neglected. This is unfortunate since the decision to offshore activities also includes R&D. We use unique and rich firm level data for the Swedish manufacturing sector to analyze how offshoring impacts domestic R&D and how these effects vary with respect to target region and type of firm. The results suggest that offshoring of production alter a firm’s investments in R&D in Sweden and that a negative impact on home country R&D is confined to offshoring by non-multinationals and offshoring to Europe and EU15 countries.

Keywords: Offshoring; R&D; Manufacturing sector; EU15

JEL-codes: C23; F16; F23; J23

12 pages, October 21, 2011

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pk_pt_offshoring_wp180.pdf PDF-file 

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