We propose an endogenous growth model with offshoring to investigate its effects on product innovation and growth in …

-country dynamic Ricardian model with endogenous innovation and hold-up problems, the value chain consists of two activities …, innovation and production. Entry in the market happens through R&D and entrants face two decisions. The 'location decision … perform innovation and production within the same vertically integrated structure or not. In this framework, the quality of …

innovation. In so doing, we model an industry in which R&D is performed by independent research labs and outsourcing production …

upstream and downstream parties at the production stage feeds back into innovation and growth. Our dynamic perspective reveals … specialization costs of vertical integration. In so doing, they neglect the effects of their choices on innovation and growth. Hence …