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The Impact of Vertical R&D Cooperation on Firm Innovation: An Empirical Investigation

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  • Najib Harabi

Abstract

The recent surge of interfirm cooperative agreements can be seen to express a way for firms to respond to and organize market failure, especially in technology markets. The incentives for firms to internalize activities are to avoid the disadvantages, or capitalize on the advantages, of imperfections or disequilibria in external mechanisms of resource allocation. The purpose of this paper is to investigate empirically, on the basis of data from German firms, the impact of vertical R&D cooperation on innovation in firms. The analysis is based on a survey conducted by the "Center for European Economic Research" (Zentrum fur Europaische Wirtschafts-forschung, ZEW) in Mannheim among 370 companies, mainly in the manufacturing sector. The results of the econometric analysis suggest a statistically significant impact of vertical R&D cooperation on the intensity of R&D activity in German firms. Informal modes of R&D cooperation (informal exchange of technological knowledge) seem to be more important for their innovative behavior than formal ones (joint ventures, joint development teams etc.). Since the relationship between vertical R&D cooperation and the intensity of R&D activity in innovating firms has been tested in a broader theoretical and empirical framework, the empirical results also confirm the significance of other key determinants of innovative activity, such as "technological opportunities", "appro-priability conditions" and "market demand".

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  • Najib Harabi, 2002. "The Impact of Vertical R&D Cooperation on Firm Innovation: An Empirical Investigation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(2), pages 93-108.
    • Handle: RePEc:taf:ecinnt:v:11:y:2002:i:2:p:93-108
    DOI: 10.1080/10438590210900
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    Cited by:

    1. Vitaliy Roud & Valeriya Vlasova, 2016. "Firm-Level Evidence on the Cooperative Innovation Strategies in Russian Manufacturing," HSE Working papers WP BRP 63/STI/2016, National Research University Higher School of Economics.
    2. Karbowski, Adam & Prokop, Jacek, 2019. "The Impact of Vertical R&D Cooperation on Market Performance of Firms," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 7(4), pages 73-89.
    3. Kudic, Muhamed & Guhr, Katja, 2013. "Cooperation Events, Ego-Network Characteristics and Firm Innovativeness – Empirical Evidence from the German Laser Industry," IWH Discussion Papers 6/2013, Halle Institute for Economic Research (IWH).
    4. G. Rossini, 2005. "Pitfalls in private and social incentives of vertical crossborder outsourcing," Working Papers 536, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Bergek, Anna & Bruzelius, Maria, 2010. "Are patents with multiple inventors from different countries a good indicator of international R&D collaboration? The case of ABB," Research Policy, Elsevier, vol. 39(10), pages 1321-1334, December.
    6. Karbowski, Adam, 2019. "Greed and fear in downstream R&D games," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 32, pages 63-76.
    7. Zhang, Qiao & Zhang, Jianxiong & Zaccour, Georges & Tang, Wansheng, 2018. "Strategic technology licensing in a supply chain," European Journal of Operational Research, Elsevier, vol. 267(1), pages 162-175.
    8. van Moorsel, Daryl & Cranfield, John A.L. & Sparling, David, 2005. "Factors Affecting Biotechnology Innovation in Canada: Analysis of the 2001 Biotechnology Use and Development Survey," Working Papers 34121, University of Guelph, Department of Food, Agricultural and Resource Economics.
    9. Mariia Shkolnykova & Muhamed Kudic, 2022. "Who benefits from SMEs’ radical innovations?—empirical evidence from German biotechnology," Small Business Economics, Springer, vol. 58(2), pages 1157-1185, February.
    10. René Belderbos & Martin Carree & Boris Lokshin & Juan Fernández Sastre, 2015. "Inter-temporal patterns of R&D collaboration and innovative performance," The Journal of Technology Transfer, Springer, vol. 40(1), pages 123-137, February.
    11. Rossi, Federica, 2002. "An introductory overview of innovation studies," MPRA Paper 9106, University Library of Munich, Germany, revised Jun 2008.
    12. Younghoon Kim & Yeonbae Kim & Jeong‐Dong Lee, 2011. "Corporate Venture Capital and Its Contribution to Intermediate Goods Firms in South Korea," Asian Economic Journal, East Asian Economic Association, vol. 25(3), pages 309-329, September.
    13. Timothy N. Cason & Lata Gangadharan, 2013. "Cooperation Spillovers And Price Competition In Experimental Markets," Economic Inquiry, Western Economic Association International, vol. 51(3), pages 1715-1730, July.
    14. Fernandes, S. & Cesário, M. & Barata, J.M., 2017. "Ways to open innovation: Main agents and sources in the Portuguese case," Technology in Society, Elsevier, vol. 51(C), pages 153-162.
    15. Qing He & Yu Feng & Zheyu Li, 2023. "Dynamic Complexity Analysis of R&D Levels in the Automotive Industry under the Dual-Credit Policy," Sustainability, MDPI, vol. 15(23), pages 1-25, December.
    16. Arijit Mukherjee & Achintya Ray, 2007. "Strategic Outsourcing And R&D In A Vertical Structure," Manchester School, University of Manchester, vol. 75(3), pages 297-310, June.
    17. Song, Jian & Chutani, Anshuman & Dolgui, Alexandre & Liang, Liang, 2021. "Dynamic innovation and pricing decisions in a supply-Chain," Omega, Elsevier, vol. 103(C).
    18. Schmiedeberg, Claudia, 2008. "Complementarities of innovation activities: An empirical analysis of the German manufacturing sector," Research Policy, Elsevier, vol. 37(9), pages 1492-1503, October.

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