The impact on innovation off-shoring on organizational adaptability


Baier, Elisabeth ; Rammer, Christian ; Schubert, Torben


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URL: https://ub-madoc.bib.uni-mannheim.de/35301
URN: urn:nbn:de:bsz:180-madoc-353018
Document Type: Working paper
Year of publication: 2013
The title of a journal, publication series: ZEW Discussion Papers
Volume: 13-109
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: O32 , M16 , L23 , L25,
Keywords (English): Internationalization , off-shoring , innovation , R&D , organizational adaptation , organizational adaptability
Abstract: We analyze the effects of captive off-shoring of innovation activities on the firms’ ability to adapt their organizational processes and structures. Starting from complexity theory, we use three consecutive waves of the German part of the Community Innovation Survey to test our hypotheses. We find an inverted u-shape of innovation off-shoring on the effectiveness of organizational adaptability, implying an optimal threshold value of innovation off-shoring. This value is 11% for share of off-shored R&D, 15% for downstream innovation activities such as local market adaptation, and 34% for design activities. We also analyze several contingency variables. In particular we show that the costs of innovation off-shoring in terms of reduced organizational adaptability are exacerbated by a strong focus on R&D and a strong embeddedness in on-shore networks. Smaller firms find it easier to deal with the management complexity induced by geographical dispersion of innovation activities because of their greater flexibility.

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Baier, Elisabeth ; Rammer, Christian ; Schubert, Torben (2013) The impact on innovation off-shoring on organizational adaptability. Open Access ZEW Discussion Papers Mannheim 13-109 [Working paper]
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