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Learning from R&D outsourcing vs. learning by R&D outsourcing

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  • Un, C. Annique
  • Rodríguez, Alicia
Abstract
We analyze how research and development (R&D) outsourcing influences product innovation. We propose a separation between learning from R&D outsourcing, whereby the firm improves its ability to innovate by using outsourced R&D directly in new products, from learning by R&D outsourcing, whereby the firm indirectly uses outsourced R&D by integrating it with internal R&D to create new products. Building on the knowledge-based view, we argue that learning from R&D outsourcing is likely to have an inverse U-shaped relationship with product innovation, because the initial benefits of using outsourced component R&D knowledge to innovate products is eventually outweighed by the hollowing out of the firm's ability to innovate. In contrast, we propose that learning by R&D outsourcing is likely to have a U-shaped relationship with product innovation, because the initial challenges of integrating internal and external R&D are eventually overcome, resulting in more innovations. Finally, we distinguish between domestic and foreign R&D outsourcing and propose a liability of foreignness in R&D outsourcing as it has a lower impact on new products than domestic R&D outsourcing. The empirical analysis shows that outsourced R&D has an inverted U-shaped relationship with the number of new products, while the interaction between outsourced R&D and internal R&D has a U-shaped relationship with the number of new products. It also shows that domestic outsourced R&D has a higher positive impact on the number of new products than foreign outsourced R&D.

Suggested Citation

  • Un, C. Annique & Rodríguez, Alicia, 2018. "Learning from R&D outsourcing vs. learning by R&D outsourcing," Technovation, Elsevier, vol. 72, pages 24-33.
    • Handle: RePEc:eee:techno:v:72-73:y:2018:i::p:24-33
    DOI: 10.1016/j.technovation.2017.12.003
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    5. Aishwarya Narayan & Sumukh Hungund, 2022. "Enhancing Firm Performance Through Adoption of Innovation: an Empirical Evidence from Indian Biotechnological Firms," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 2431-2456, September.
    6. Thakur-Wernz, Pooja & Bruyaka, Olga & Contractor, Farok, 2020. "Antecedents and relative performance of sourcing choices for new product development projects," Technovation, Elsevier, vol. 90.
    7. Santamaría, Luis & Nieto, María Jesús & Rodríguez, Alicia, 2021. "Failed and successful innovations: The role of geographic proximity and international diversity of partners in technological collaboration," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
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