Author(s)

Xiaoqi Rao, Ming Dai

School of Economics, Jinan University, Guangzhou, China.

This article will use the theories of comparative advantages, transaction costs, cost minimization or profit maximization, conducting a deep analysis of the internal and external alternatives for enterprise R&D with respect to in-sourcing or outsourcing by modeling from the point of view of microeconomics, according to the enterprises’ own R&D relative advantages and disadvantages, the scale of the transaction costs of product development. Based on that, this paper makes corresponding countermeasures and suggestions, in order to provide certain theoretical references for the internal and external alternatives for enterprise R&D.

Comparative Advantage, Transaction Costs, R&D In-Sourcing, R&D Outsourcing

Rao, X. and Dai, M. (2016) In-Sourcing or Outsourcing: An Economic Analysis on Internal and External Alternatives for Enterprise R&D. American Journal of Industrial and Business Management, 6, 794-804. doi: 10.4236/ajibm.2016.66073.