TY - JOUR
T1 - Talent, Geography, and Offshore R&D
AU - Fan, Jingting
N1 - Publisher Copyright:
© The Author(s) 2024. Published by Oxford University Press on behalf of The Review of Economic Studies Limited. All rights reserved.
PY - 2025/3/1
Y1 - 2025/3/1
N2 - I model and quantify the impact of a new dimension of globalization: offshore R&D. In the model, firms employ researchers across the globe to develop new product blueprints and then engage in offshore production and exporting. Frictions impeding trade and the separation of production from R&D lead to a “market-access” motive for offshore R&D, while cross-country differences in the distributions of firm knowhow and worker ability generate a “talent-acquisition” motive. I discipline the model using empirical facts derived from a new firm-level dataset. Counterfactual experiments show that the two motives can account for a significant portion of the observed offshore R&D. Incorporating offshore R&D amplifies the gains from globalization by a factor of 1.3 and generates new implications for the impacts of traditional forms of global integration, namely trade and multinational production.
AB - I model and quantify the impact of a new dimension of globalization: offshore R&D. In the model, firms employ researchers across the globe to develop new product blueprints and then engage in offshore production and exporting. Frictions impeding trade and the separation of production from R&D lead to a “market-access” motive for offshore R&D, while cross-country differences in the distributions of firm knowhow and worker ability generate a “talent-acquisition” motive. I discipline the model using empirical facts derived from a new firm-level dataset. Counterfactual experiments show that the two motives can account for a significant portion of the observed offshore R&D. Incorporating offshore R&D amplifies the gains from globalization by a factor of 1.3 and generates new implications for the impacts of traditional forms of global integration, namely trade and multinational production.
UR - https://www.scopus.com/pages/publications/105000101400
UR - https://www.scopus.com/pages/publications/105000101400#tab=citedBy
U2 - 10.1093/restud/rdae044
DO - 10.1093/restud/rdae044
M3 - Article
AN - SCOPUS:105000101400
SN - 0034-6527
VL - 92
SP - 1022
EP - 1060
JO - Review of Economic Studies
JF - Review of Economic Studies
IS - 2
ER -