| Author Name | YAMASHITA Nobuaki (Royal Melbourne Institute of Technology (RMIT) / Keio University) / YAMAUCHI Isamu (Research Associate, RIETI) |
|---|---|
| Creation Date/NO. | September 2019 19-E-068 |
| Research Project | Frontiers of Innovation Policy: Evidence from micro data |
| Download / Links |
Abstract
There has been a global shift in the distribution of manufacturing jobs and activities away from high-wage countries to low-wage countries for the past few decades. This paper examines a largely unexplored channel of the effects of offshore production on onshore (domestic) innovation performance. Controlling for the endogeneity, we find that increased offshore employment and R&D do not have positive impact on the domestic innovation measured by the number of patent applications and the number of forward citations on average. However, offshore R&D increases the quality of domestic innovation when the firms expand R&D function to the developed countries while it has a negative effect in the developing countries. We also find a synergistic effect between production and R&D activities. Therefore, separating the two activities can decrease the efficiency of resource allocation on the domestic innovation.
Published: Yamashita, Nobuaki, and Isamu Yamauchi, 2019. "The effects of offshore production on onshore innovation: Evidence from Japanese multinationals," Research Policy, Vol. 48(9), 103836
https://www.sciencedirect.com/science/article/pii/S0048733319301568
