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The Catalysing Role of In-House R&D in Fostering the Complementarity of Innovative Inputs

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Author Info
Alessandra Catozzella (University of Pavia)
Marco Vivarelli () (IPTS Seville, Catholic University of Milan, CSGR Warwick and IZA)

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Abstract

The aim of this study is to test the possible catalysing role of in-house R&D in fostering the complementarity of innovative inputs on a sample of 3045 manufacturing firms drawn from the third Italian Community Innovation Survey (1998-2000). The interactions between four different sources of innovation - internal and external R&D, embodied and disembodied technological acquisitions - have been simultaneously explored through the two (direct and indirect) testing frameworks for complementarity. Results from both the approaches show that the innovative process is a phenomenon combining within itself both complementarity and substitutability relationships, depending both on the typology of the targeted innovation output and on the particular combination of innovative inputs we focus on. In particular, it is in-house R&D that seems to create the precondition allowing firms to enjoy complementarity effects. Indeed, the possibility of exploiting synergies between different innovative inputs turns out to be subordinated to having undertaken a minimum amount of internal R&D. The implication of this result is that a role for in-house R&D emerges, beyond its direct effect in generating an innovative output: even if internal research is not a necessary precondition for a firm to be innovative, it should still be carried out because of its important role in the generation of synergies that amplify the impacts of the other innovative inputs it interacts with.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3126.

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Length: 42 pages
Date of creation: Oct 2007
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Handle: RePEc:iza:izadps:dp3126

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Related research
Keywords: R&D innovation complementarity supermodularity substitutability

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Find related papers by JEL classification:
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives

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References listed on IDEAS
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  1. Jacques Mairesse & Pierre Mohnen, 2002. "Accounting for Innovation and Measuring Innovativeness: An Illustrative Framework and an Application," American Economic Review, American Economic Association, vol. 92(2), pages 226-230, May. [Downloadable!] (restricted)
  2. Arora, Ashish, 1996. "Testing for complementarities in reduced-form regressions: A note," Economics Letters, Elsevier, vol. 50(1), pages 51-55, January. [Downloadable!] (restricted)
  3. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September. [Downloadable!] (restricted)
  4. Andrea Conte & Marco Vivarelli, 2005. "One or Many Knowledge Production Functions? Mapping Innovative Activity Using Microdata," IZA Discussion Papers 1878, Institute for the Study of Labor (IZA). [Downloadable!]
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  5. Boris Lokshin & Rene Belderbos & Martin Carree, 2006. "Internal and external R&DF complements or substitutes? Evidence from a dynamic panel data model," Hi-Stat Discussion Paper Series d06-163, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
  6. Claudio A. Piga & Marco Vivarelli, 2004. "Internal and External R&D: A Sample Selection Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(4), pages 457-482, 09. [Downloadable!] (restricted)
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  7. Beneito, Pilar, 2003. "Choosing among alternative technological strategies: an empirical analysis of formal sources of innovation," Research Policy, Elsevier, vol. 32(4), pages 693-713, April. [Downloadable!] (restricted)
  8. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research, Innovation and Productivity: an Econometric Analysis at the Firm Level," Papers 9833, Institut National de la Statistique et des Etudes Economiques-.
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  9. Mariacristina Piva & Marco Vivarelli, 2007. "Corporate Skills as an Ex-Ante Incentive to R&D Investment," IZA Discussion Papers 2562, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Belderbos René & Carree Martin & Lokshin Boris, 2006. "Complementarity in R&D cooperation strategies," Research Memoranda 013, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
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  11. C. Piga & M. Vivarelli, 2003. "Sample selection in estimating the determinants of cooperative R&D," Applied Economics Letters, Taylor and Francis Journals, vol. 10(4), pages 243-246, March. [Downloadable!] (restricted)
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