R&amp;D, International Sourcing, and the Joint Impact on Firm Performance

Bøler, Esther Ann; Moxnes, Andreas; Ulltveit‐Moe, Karen Helene

doi:10.1257/aer.20121530

Cited by 187 publications

(134 citation statements)

References 19 publications

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“…Table 5 shows a clear ranking of firm performance measured as innovation intensity: more innovative firms are not only larger measured by sales and employment, but also are more productive (sales per worker). 15 This difference from frequency of individual innovation modes in Table 4 where less frequent modes are reserved to larger although not necessarily more productive firms. If we look beyond averages, this inconsistency is less clear cut.…”

Section: Innovation and Firm Performancementioning

confidence: 90%

“…This differs from the picture for internationalization: firms involved in a larger number of internationalization modes, and firms involved in rarer internationalization 14 In a similar vein, the EU Innovation Scorecard (http://ec.europa.eu/enterprise/policies/innovation/files/ius-2013_en.pdf) uses a combined indicator of 24 variables to assess innovation at national level. 15 Starting from the work of Griliches (1998) on the relationship between innovation investment (R&D) and productivity, a number of studies point to innovation as an important source of productivity differences between firms. A survey of this literature by Hall (2011) finds a substantial positive impact of product innovation on revenue productivity, with a more ambiguous impact of process innovation.…”

Section: Innovation and Firm Performancementioning

confidence: 99%

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Internationalization and innovation of firms: evidence and policy

et al. 2013

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We use a representative and cross-country comparable sample of manufacturing firms (EFIGE) to document patterns of interaction among firm-level internationalization, innovation and productivity across seven European countries (Austria, France, Germany, Hungary, Italy, Spain, United Kingdom). We find strong evidence of positive association among the three firm-level characteristics across countries and sectors. We also find that the positive correlation between internationalization and innovation survives after controlling for productivity, with some evidence of causality running from the latter to the former. Our analysis suggests that export promotion per se is unlikely to lead to sustainable internationalization because internationalization goes beyond export and because, in the medium-to-long term, internationalization is driven by innovation. We recommend coordination and integration of internationalization and innovation policies 'under one roof' at both the national and EU levels, and propose a bigger coordinating role for EU institutions.We are grateful to three anonymous referees. We also thank Marco Manacorda, Catherine Thomas, Myriam

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Section: Innovation and Firm Performancementioning

confidence: 90%

Section: Innovation and Firm Performancementioning

confidence: 99%

Internationalization and innovation of firms: evidence and policy

et al. 2013

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“…As a result, the productivity level of a country depends on its own innovation and on the foreign innovations embodied in imported intermediate products. Preferences are recursive, so that consumers care about the timing of resolution of uncertainty and fear variation in the economy's long-run future growth 1 The international trade literature has argued in favor of trade in varieties as a channel through which R&D diffuses across countries (Broda, Greenfield, and Weinstein 2006;Bøler, Moxnes, and Ulltveit-Moe 2012;Santacreu 2015). Other channels include the effect of multinationals in spreading the benefits of R&D across countries (Ramondo 2009;Guadalupe, Kuzmina, and Thomas 2010) and the effect of knowledge spillovers by way of international networks (Cai and Li 2012).…”

mentioning

confidence: 99%

International R&D Spillovers and Asset Prices

Gavazzoni

Santacreu

2015

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We provide new empirical evidence of a relationship between asset prices and tradeinduced international R&D spillovers; in particular, we find that pairs of countries that share more research and development exhibit more highly correlated stock market returns and less volatile exchange rates. We develop an endogenous growth model of innovation and international technology diffusion that accounts for these empirical findings. A calibrated version of the model matches several important asset pricing and quantity moments, which helps explain some of the classical quantity-price puzzles highlighted in the literature on international macroeconomics.

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“…A number of papers analyze how trade affects firms' adoption of technology (Melitz and Constantini, 2008;Lileeva and Trefler, 2010;Bustos, 2011;Boler et al, 2015;Bloom et al, 2016). I do not model the decision to adopt technology, but instead employ a difference-in-difference approach to assess the relationship between communication technology and firms' decisions to fragment production and offshore.…”

Section: Introductionmentioning

confidence: 99%

Technology and Production Fragmentation: Domestic versus Foreign Sourcing

Fort

2016

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This paper provides direct empirical evidence on the relationship between technology and firms' global sourcing strategies. Using new data on U.S. firms' decisions to contract for manufacturing services from domestic or foreign suppliers, I show that a firm's adoption of communication technology between 2002 to 2007 is associated with a 3.1 point increase in its probability of fragmentation. The effect of firm technology also differs significantly across industries; in 2007, it is 20 percent higher, relative to the mean, in industries with production specifications that are easier to codify in an electronic format. These patterns suggest that technology lowers coordination costs, though its effect is disproportionately higher for domestic rather than foreign sourcing. The larger impact on domestic fragmentation highlights its importance as an alternative to offshoring, and can be explained by complementarities between technology and worker skill. High technology firms and industries are more likely to source from high human capital countries, and the differential impact of technology across industries is strongly increasing in country human capital.

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R&D, International Sourcing, and the Joint Impact on Firm Performance

Cited by 187 publications

References 19 publications

Internationalization and innovation of firms: evidence and policy

Internationalization and innovation of firms: evidence and policy

International R&D Spillovers and Asset Prices

Technology and Production Fragmentation: Domestic versus Foreign Sourcing

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