It is striking that by far the lion's share of empirical studies on the impact of outsourcing on firms considers … industrialized countries. However, outsourcing by firms from emerging economies is far from negligible and growing. This paper … investigates the link between outsourcing and innovation empirically using firm-level data for over 20 emerging market economies …

We study the decision of firms between vertical integration and outsourcing in a dynamic setting with product … innovation. In so doing, we model an industry in which R&D is performed by independent research labs and outsourcing production … requires complementary upstream and downstream inventions. In the presence of search friction and incomplete outsourcing …