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We investigate the effect of research and development (R&D) offshoring from highincome regions to prominent emerging economies. Specifically, we examine whether there is a complementary relationship between a region's home and foreign investments in R&D that affects home's regional knowledge production. Using a theoretical framework based on economic geography and the literature on international knowledge sourcing, we conjecture that high-income regions would have a comparative advantage in high-tech R&D, while emerging economies would have an advantage in medium/low R&D. Complementarity should obtain when the comparative advantages of the geographical areas are utilized. We find overall empirical support for this prediction.

This paper investigates the relation between cooperation in innovation activities and innovation before and during the last economic recession. We find that cooperation in innovation activities has a stronger relation with radical innovation performance during the economic recession than before, this being true irrespectively of whether the partners are national or international. This benefit from cooperation during the economic turmoil is higher in the case of firms having different types of partners simultaneously. We also find that past cooperation in innovation activities is positively associated to innovation performance during the crisis.

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The Porter hypothesis claims that well-