Determinants of International R&D Outsourcing: The Role of Trade |
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Authors: | María García‐Vega Elena Huergo |
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Affiliation: | 1. University of Nottingham, School of Economics, UK;2. University Complutense of Madrid, Spain |
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Abstract: | This paper investigates the determinants of international R&D outsourcing, in particular the role of trade. We sketch a monopolistic competition model with heterogeneous firms where outsourcing increases a firm's fixed transaction costs as well as its productivity. Financial constraints affect the decision to outsource R&D more to nonexporters than to exporters. In contrast, exporters are more sensitive to a lack of information because they have higher losses when there is technology leakage. We test these predictions using a panel database of Spanish companies. The results highlight the relevance of information in competitive markets, and the role of trade to induce companies to engage in other globalization strategies. |
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