“Does R&D offshoring displace or strengthen knowledge production at home? Evidence from OECD countries”

This chapter aims to investigate whether offshoring of R&D activity in fast-growing economies impacts on the knowledge creation of home investing countries, especially focusing on the effects on the sectoral focus/mix of knowledge production at home. In particular, the study develops an exploratory cross-country analysis focusing on OECD countries investing in BRICKST (Brazil, Russia, India, China, Korea, Singapore and Taiwan), by using a knowledge production function framework. Our findings suggest a positive impact of R&D offshore in BRICKST on the knowledge production of home OECD investing countries. In particular, knowledge production at home seems to benefit from both domestic R&D as well as from R&D activities offshore in BRICKST as far as high-technology sectors are concerned, while in medium- and low-technology sectors it is primarily fed by innovative activity offshore in BRICKST.