Krieger, Bastian; Trottner, Fabian - 2024
We study the implications of services trade for firm innovation. Using a quasi-experimental shift-share design, we find … indigenously sourced R&D. To confront this evidence, we develop a theoretical model. It demonstrates outsourcing can foster firms …’ innovation efficiency by mitigating decreasing economies of scale in in-house innovation efforts. As a result, firms become more …