The Effect of Knowledge Management on Product Innovation--Evidence from the Chinese Software Outsourcing Vendors (Report‪)‬

1. Introduction Offshore outsourcing cooperation is becoming very popular among local vendors not only as an effective tool for market access but also as an effective means to learn from foreign buyers. Cooperation often entails a transfer of certain value-chain activities from foreign firms from the developed economies to local firms in the emerging economies such as China and India. In order to improve their innovation, the local vendors hope to improve their innovation through cooperation. In this case, knowledge acquisition is an integral part of local vendors' motive to engage in international cooperation.