International Outsourcing Through Foreign Direct Investment And Intellectual Property Protection
- Topics:
- Outsourced Services
- Tags:
- Business Operations,
- Outsourcing & Subcontracting,
- Outsourcing,
- Least Squares Regression,
- It Operations,
- Investment,
- Intellectual Property Protection,
- Intellectual Property,
- Foreign Direct Investment (FDI),
- Foreign Direct Investment,
- ...
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Overview: This paper studies international outsourcing through Foreign Direct Investment (FDI) by Multinational Enterprise (MNE). Outsourcing process is decomposed to two steps? choosing production location and shipping products back to home country. Outsourcing is measured as the ratio of affiliate sales over US parent sales. Based on cost comparison, Factors that affect production cost and factors that affect trade cost both matter. Improved Intellectual Property Protection (IPP) increases outsourcing by reducing the effective cost of skilled labor and by strengthening the impact of R&D. Bilateral data between US and other countries are used for empirical test. Least Squares (LS) regression is applied to positive outsourcing observations and the zero-outsourcing observations are added in the Tobit regression. IPP is significant in LS specifications but not in Tobit specifications.
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Format: PDF | Size: 295KB | Date: Sep 2004 | Pages: 33



