Article
Going Far to Go Further: Offshoring, Exploration, and R&D Performance
Journal of Business Research
(2019)
Abstract
Despite its many benefits, firms may not conduct exploration because of inhibitive costs. We maintain that offshoring provides a cost-leveraging strategy that can help firms overcome this constraint, and enhance their R&D performance with increased exploration. Empirical evidence supports our thesis: first, firms that offshore more of their R&D activities to developing countries engage in greater exploration; second, the degree to which firms benefit from offshoring is contingent on their R&D intensity, such that firms with lower levels of R&D intensity enjoy greater benefits from offshoring for exploration than those with higher levels; and third, greater exploration confers an R&D performance advantage to firms where greater exploration increases firms' successes in preclinical trials. Our study offers two implications: (1) what drives firms' exploration is not just what they can do (competencies), but also what they can afford to do (costs); and (2) offshoring enhances exploration, which, in turn, increases R&D performance.
Keywords
- Offshoring,
- Exploration,
- R&D performance,
- Cost-leveraging
Disciplines
Publication Date
2019
DOI
10.1016/j.jbusres.2018.01.007
Citation Information
Curba Lampert and Minyoung Kim. "Going Far to Go Further: Offshoring, Exploration, and R&D Performance" Journal of Business Research Vol. 103 (2019) p. 376 - 386 Available at: http://works.bepress.com/mykim/9/