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Medientyp:
E-Artikel
Titel:
Innovation returns and the economics of offshored IT R&D
Beteiligte:
Datta, Pratim;
Bhattacharyya, Kuntal
Erschienen:
Emerald, 2012
Erschienen in:
Strategic Outsourcing: An International Journal, 5 (2012) 1, Seite 15-35
Sprache:
Englisch
DOI:
10.1108/17538291211221933
ISSN:
1753-8297
Entstehung:
Anmerkungen:
Beschreibung:
PurposeHow appropriate are the innovation returns from offshored information technology (IT) research and development (R&D)? In light of the emergence and spate of IT R&D offshoring, this paper aims to investigate the mechanics of governance in attracting IT R&D inflow in offshored hosts and, more importantly, whether R&D offshoring provides instrumental and legitimate IT innovation returns (intellectual property (IP)) to outsourcing countries as investors.Design/methodology/approachThe authors combine the calculus of host‐country governance and IT R&D inflows with IT innovation returns to the US from its offshored IT R&D investments. They argue on the basis of the golden mean – a principle of moderation where too little or too stringent governance deters IT R&D investments; more importantly, too little and too much IT R&D investments fail to stimulate IT innovation returns to the investors.FindingsAn analysis of 81 World Trade Organization (WTO) countries underscores the authors' argument that the calculus between governance and IT innovation productivity is mediated by IT R&D investments. However, the relationship is non‐linear with diminishing marginal returns‐to‐scale.Research limitations/implicationsThe non‐linear relationships between governance, R&D foreign direct investments (FDI) and patent‐level returns show a threshold effect often overlooked by existing research. Together, this article points out the need for researchers to consider diminishing returns to scale from overarching emphases on governance or IT R&D over‐investments.Practical implicationsAs multinational companies in developed countries increasingly offshore IT‐related R&D, this investigation is relevant, current, and disconcerting – implying the need for multinationals to revisit their IT R&D offshoring strategies and priorities.Originality/valueThese research findings do not support the “win‐win” pitch for IT R&D offshoring. Instead, this research points to the fact that, while there are some economic benefits derived from R&D FDI, there are inflection points beyond which innovations returns diminish. Where the inflection point lies depends on countries as well as specific firms and industries.