AIB 2012 Conference Proceedings - Academy of International ...

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performance. (For more information, please contact: Lucia Piscitello, Politecnico di Milano, Italy:
lucia.piscitello@polimi.it)
Whether or Not to Prepare for Offshoring: A Simulation Study
Marcus Møller Larsen, Copenhagen Business School
Christian Geisler Asmussen, Copenhagen Business School
Torben Pedersen, Copenhagen Business School
A consequence of offshoring is increased coordination costs. To counter this, firms can strive to identify a cost
reducing organizational configuration either ex ante or ex post to the offshoring implementation. In this paper,
we investigate the performance implications of these contrasting strategies through a computational model of
offshoring. We find that a proactive approach to offshoring is largely beneficial if the impact of geographic
distance and coordination costs relative to production costs is sufficiently high, but that this changes more
towards the reactive approach if this diminishes. Thus, we explicate important contingencies in the paradox that
firms face when balancing between strategic rationales such as lower production costs in foreign locations and
the changing costs of coordination when implementing such strategic rationales. (For more information, please
contact: Marcus Møller Larsen, Copenhagen Business School, Denmark: mml.smg@cbs.dk)
Does the Global Fragmentation of R&D Activities Pay Back The Home Region Perspective
Grazia D. Santangelo, University of Catania
Lorena M. D'Agostino, University of Catania
R&D offshoring has increasingly involved emerging countries as host locations and promoted a greater
fragmentation of R&D activities across borders. As a result, a subtle international division of labor in knowledge
production has yielded a fine-slicing of R&D activities with the highest value-added activities located in the most
advanced countries and the lowest value-added activities in emerging countries. However, no study, to our
knowledge, has investigated whether finely sliced foreign R&D activities complement each other in terms of
greater knowledge production at home. Drawing on a rich dataset, we estimate a regional knowledge
production function and apply a direct complementarity test. Our results suggest that the global fragmentation
of R&D activities produces synergic effects on the knowledge production of the home investing OECD regions
when R&D activities are optimally rather than randomly located. (For more information, please contact: Grazia
D. Santangelo, University of Catania, Italy: grsanta@unict.it)
Spatial Linkages and Offshoring Location Choice
Ari Van Assche, HEC Montreal
Alyson C. Ma, University of San Diego
We argue that a firm's offshoring location choice not only depends on a location's production costs, but also on
its spatial linkages with other parts of the global value chain. A location that is closer to upstream suppliers and
downstream markets should attract more offshoring activities. To validate this conjecture, we use detailed
processing trade data for 29 Chinese provinces. We find that three types of spatial linkages affect a province's
attractiveness as an offshoring location: a province's distance to its closest seaport, the proximity of this seaport
to international suppliers, and the proximity of this seaport to international markets. (For more information,
please contact: Ari Van Assche, HEC Montreal, Canada: ari.van-assche@hec.ca)
AIB 2012 Conference Proceedings
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