Going offshore or better staying in? Spatial relocation strategies and their impact on firm innovativeness. Issue 12 (12th July 2017)

• Record Type: Journal Article
• Authors: Kreutzer, Fabian; Mitze, Timo
• Is Part Of: Applied economics letters. Volume 24:Issue 12(2017)
• Page Start: 837
• Page End: 840
• Publication Date: 2017-07-12
• Subjects: Relocation -- offshoring -- innovation -- difference-in-difference -- multiple treatments; F23 -- O31 -- C23; Economics -- Periodicals; Economics, Mathematical -- Periodicals; 330
• DOI: 10.1080/13504851.2016.1231892
• Languages: English
• ISSNs: 1350-4851

Abstract

ABSTRACT: We analyse the short- to mid-run effects of spatial relocation strategies on firm innovativeness and productivity growth. Using conditional difference-in-difference estimation with multiple treatments, we find for a sample of German firms in 1999–2013 that offshoring has a statistically significant negative impact on the firms' innovation activity and productivity growth vis-à-vis nonrelocating comparison firms. In contrast, we find a positive link between domestic relocation activities and the firms' propensity to introduce a product innovation. Firms should thus carefully account for potentially distorting performance effects when deciding about the spatial scale of relocation strategies in the short to mid-run.