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Complementarity in the Innovation Strategy: Internal R&D, External Technology Acquisition and Cooperation

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Author Info
Cassiman, Bruno
Veugelers, Reinhilde

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Abstract

Successful innovation depends on the development and integration of new knowledge in the innovation process. In order to innovate successfully, the firm will combine different innovation activities. In addition to doing own research and development, firms typically are engaged in the acquisition of knowledge on the technology market and cooperate actively in R&D with other firms and research organizations. In this Paper we provide evidence on complementarity between different innovation activities. Using data from the Community Innovation Survey on Belgian manufacturing firms, we show that firms that are only engaged in a single innovation strategy, either internal R&D activities or sourcing technology externally, introduced fewer new or substantially improved products compared to firms which combine internal and external sourcing. This result is consistent with complementarity between own R&D and external technology sourcing activities. Furthermore, we show that the different innovation activities are strongly positively correlated and identify common drivers, resulting in the perceived complementarity between these innovation activities. An important finding is that a capacity to strategically protect intellectual property and a more basic R&D base which may serve as an absorptive capacity, are important common drivers for the different innovation activities.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3284.

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Date of creation: Mar 2002
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Handle: RePEc:cpr:ceprdp:3284

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Related research
Keywords: complementarity; innovation; R&D; Technology acquisition;

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Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Stephen Roper, 2005. "Cross-Border and Local Cooperation on the island of Ireland - A Behavioural Perspective," ERSA conference papers ersa05p475, European Regional Science Association. [Downloadable!]
  2. Panayotis Dessyllas & Alan Hughes, 2005. "R&D and Patenting Activity and the Propensity to Acquire in High Technology Industries," Industrial Organization 0507008, EconWPA. [Downloadable!]
  3. Panayotis Dessyllas & Alan Hughes, 2005. "R&D and Patenting Activity and the Propensity to Acquire in High Technology Industries," ESRC Centre for Business Research - Working Papers wp298, ESRC Centre for Business Research. [Downloadable!]
  4. U. Witt & C. Zellner, 2007. "How Firm Organizations Adapt to Secure a Sustained Knowledge Transfer," Papers on Economics and Evolution 2007-19, Max Planck Institute of Economics, Evolutionary Economics Group.
  5. Arbussà, Anna & Coenders, Germà, 2005. "Innovation strategies in the presence of technology markets: evidence from Spanish innovative firms," Working Papers of the Department of Economics, University of Girona 15, Department of Economics, University of Girona. [Downloadable!]
  6. Cassiman, Bruno & Veugelers, Reinhilde, 2003. "R&D Cooperation Between Firms and Universities: Some Empirical Evidence from Belgian Manufacturing," CEPR Discussion Papers 3951, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  7. Cassiman, Bruno & Veugelers, Rainhilde, 2003. "Which firms have cooperative R&D agreements with universities? Some empirical evidence from Belgian manufacturing," IESE Research Papers D/502, IESE Business School. [Downloadable!]
  8. Claudio A. Piga & Marco Vivarelli, 2003. "Internal and External R&D: A Sample Selection Approach," Papers on Entrepreneurship, Growth and Public Policy 2004-05, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
    Other versions:
  9. Alessandra Catozzella & Marco Vivarelli, 2007. "The Catalysing Role of In-House R&D in Fostering the Complementarity of Innovative Inputs," IZA Discussion Papers 3126, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Marco Da Rin & María Fabiana Penas, 2007. "The Effect of Venture Capital on Innovation Strategies," NBER Working Papers 13636, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Lööf, Hans, 2007. "Technology Spillovers and Innovation - the importance of domestic and foreign sources," Working Paper Series in Economics and Institutions of Innovation 83, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies, revised 29 Jun 2007. [Downloadable!]
  12. M. Pilar Socorro, 2004. "R&D investment as a signal in corporate takeovers," Documentos de trabajo conjunto ULL-ULPGC 2004-07, Facultad de Ciencias Económicas de la ULPGC. [Downloadable!]
  13. Martin Woerter & Stephen Roper, 2008. "Openness and Innovation - Home and Export Demand Effects on Manufacturing Innovation: Panel Data Evidence for Ireland and Switzerland," KOF Working papers 08-210, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
  14. Pierre Mohnen & Lars-Hendrick Röller, 2003. "Complementarities in Innovation Policy," CIRANO Working Papers 2003s-60, CIRANO. [Downloadable!]
    Other versions:
  15. Kaiser, Ulrich, 2003. "Strategic complementarities between different types of ICT-expenditures," ZEW Discussion Papers 03-46, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  16. Chia-Lin CHANG & Stéphane ROBIN, 2006. "Knowledge sourcing and firm performance in an industrializing economy: the case of Taiwan in the 1990s," Working Papers of BETA 2006-33, Bureau d'Economie Théorique et Appliquée, ULP, Strasbourg. [Downloadable!]
  17. Lokshin,Boris & Carree,Martin & Belderbos,René, 2004. "Testing for complementarity and substitutability in case of multiple practices," Research Memoranda 002, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
  18. Sanjeev Goyal & Alexander Konovalov & Jose Luis Moraga-Gonzalez, 2003. "Hybrid R&D," Economics Discussion Papers 564, University of Essex, Department of Economics. [Downloadable!]
    Other versions:
  19. Stephen Roper & Nola Hewitt-Dundas & James H Love, 2003. "An Ex Ante Evaluation Framework for the Regional Impact of Publicly Supported R&D Projects," ERSA conference papers ersa03p100, European Regional Science Association. [Downloadable!]
  20. Laura Paija, 2003. "Distribution of Intellectual Property Rights and the Development of Technology Suppliers," Discussion Papers 844, The Research Institute of the Finnish Economy. [Downloadable!]
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