Trade Openness and Vertical Integration: Evidence from Korean Firm-Level Data

2009 ◽  
Author(s):  
Hea-Jung Hyun ◽  
Jung Hur
Keyword(s):  
Vertical Integration ◽  
Trade Openness ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data ◽  
Korean Firm

Outsourcing and Innovation: An Empirical Exploration of the Dynamic Relationship

2013 ◽  
Vol 13 (1) ◽  
pp. 395-418 ◽  
Author(s):  
Robert V. Breunig ◽  
Sasan Bakhtiari
Keyword(s):  
Vertical Integration ◽  
Low Cost ◽  
Firm Strategy ◽  
Strong Support ◽  
Firm Level ◽  
Dynamic Relationship ◽  
Cost Cutting ◽  
Level Data ◽  
Firm Level Data ◽  
Cutting Strategy

Abstract: We study the implications of vertical integration on innovation performance using firm-level data in Australian manufacturing. We use the data to distinguish between low-cost-oriented and innovation-oriented outsourcing. Outsourcing without innovation lowers the costs at the expense of damaging the future chances of innovation, while innovation-oriented outsourcing leads to higher costs but increases the likelihood of future innovation. For firms that innovate and outsource, the probability of future innovation is 49% compared to 8% for those who outsource without innovating. Comparing across firms that innovate, simultaneous outsourcing increases the probability of future innovation by 5%. Innovation-oriented outsourcing is accompanied with firms shifting expenditure to research and development. Our results offer strong support that outsourcing may be used not just as a cost-cutting strategy, but as a part of a comprehensive firm strategy to innovate and improve.

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