Outsourcing of Innovation
نویسندگان
چکیده
This paper looks at the outsourcing of research and development (R&D) activities. We consider cost reducing R&D and allow manufacturing firms to decide whether to outsource the project to research subcontractors or carry out the research in-house. We use a principal-agent framework and consider fixed and revenue-sharing contracts. We solve for the optimal contract under these constraints. We find that allowing for revenue-sharing contracts increases the chance of outsourcing and improves economic efficiency. However, the principal may still find it optimal to choose a contract that allows the leakage to occur – a second-best outcome when leakage cannot be monitored or verified. Moreover, stronger protection of intellectual property need not induce more R&D outsourcing nor improve welfare. (JEL Classification Numbers: D21, O31, L14)
منابع مشابه
Investigating the Relationship Between Outsourcing and Innovation
The linkages between outsourcing and innovation are complex. Some findings suggest that outsourcing is a way to generate increased levels of innovation. However, some recommendations extracted from the IT outsourcing literature do not seem to favor innovation through outsourcing arrangements. By understanding the different types of innovation and combining this knowledge with the IT outsourcing...
متن کاملThe Mechanism and Empirical Test on the Effect of Technological Innovation on International Service Outsourcing in China
Technological innovation can promote the growth of international service outsourcing in China by advancing enterprise ability to undertake international service outsourcing, human resource quality, upgrading of international service outsourcing industry and base building of international service outsourcing. Based on the relative data from 10 areas where the international service outsourcing is...
متن کاملIT Outsourcing as a Source of Open Innovation
Outsourcing has been considered as an important source of innovation, nowadays. The paradigm of open innovation suggests that valuable ideas may occur either inside or outside the company, as in the Information Technology (IT) outsourcing. In view of the emerging paradigm of open innovation, this paper analyzes the IT outsourcing process as an external source of open innovation. This research h...
متن کاملIS Outsourcing Governance in Innovation-Focused Relationships: An Empirical Investigation
Out of the various motivations and intentions for outsourcing information technology, customers’ expectations of innovative IT products and services for business advantage have only recently become an emerging issue among IT service providers and their customers. But little is known about ITenabled innovation in IS outsourcing settings and how to manage such outsourcing relationships. Do custom...
متن کاملOutsourcing in the Innovation Process: Locational and Strategic Determinants
There is now substantial evidence that locational and agglomeration influences can have a significant positive effect on innovation performance. Networking and boundary-spanning activities are also increasingly recognised as important contributors to innovation success. This paper attempts to discover whether these factors are linked: in particular, is there any link between plant location, agg...
متن کاملStrategic innovation through outsourcing: The role of relational and contractual governance
There is growing evidence that client firms expect outsourcing suppliers to transform their business. Indeed, most outsourcing suppliers have delivered IT operational and business process innovation to client firms; however, achieving strategic innovation through outsourcing has been perceived to be far more challenging. Building on the growing interest in the IS outsourcing literature, this pa...
متن کامل