International R&D service outsourcing by technology-intensive firms: Whether and where?

We combine the streams of literature on outsourcing and offshoring to investigate (1) whether choosing an R&D offshore outsourcing strategy by technological firms is advisable, and (2) where these firms are more likely to allocate these R&D services outsourcing agreements offshore, namely, in developed or developing economies. Using original survey data from European and U.S. firms in technology-intensive industries, we place especial emphasis on the fact that certain firm-specific capabilities, such as technological and international expertise, are required in order to outsource R&D overseas, especially when offshoring to developing economies, as transaction costs are still the main deterrent to outsource offshore to these regions. In addition, our results also show that in the specific case of R&D services outsourcing, knowledge-seeking objectives lead to outsource to developed economies.