The Department of Technology Management and Economics at Chalmers University of Technology, Sweden, invited Isabella Hatak, Associate Professor at NIKOS (BMS), to give a talk in their prestigious Innovation & Entrepreneurship Research Seminar.
Last week, Isabella took this valuable opportunity and discussed her recent research results on the contingent relationship between innovation offshoring (IO) practices and firm innovation performance with the highly engaged TME group. Drawing on neo-institutional theory she outlined how offshoring firms’ task environments, the time at which IO is implemented, and their home country’s regulative, normative and cognitive institutional dimensions shape the IO-innovation performance relationship. By combining 52 samples and 66,308 observations, she found, together with her co-authors, that overall IO is positively related to innovation performance and that the regulative (rule of law), normative (openness of the market), and cognitive dimensions (culture) of the institutional environment in which the offshoring firm is embedded are moderators of the IO-innovation performance relationship.
Together with the seminar participants, the study’s theoretical contributions to the institution-based view of internationalization and performance and to research on institutional complexity were explored.
Moreover, and regarding management practice, Isabella’s findings resulted in vivid discussions among the audience since offshoring in general is a controversial practice. Many multinational firms have successfully offshored innovation activity in the past decades including firms from industrialized countries such as General Electric, Siemens, and Toshiba, as well as emerging giants such as Huawei and Haier. These firms aim to tap into a global talent pool and be close to the markets they sell in. However, critics argue that IO results in a shift of jobs and capabilities to host countries which has detrimental effects on business and society in the home country. Conclusions were made that this research is timely in informing managers and policy-makers about the average effect of IO and the conditions that facilitate innovation benefits associated with IO.
