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Knowledge Complementarity of a Firm’s Internal and External R&D Capabilities

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  • Koski, Heli
  • Svento, Rauli

Abstract

We use data from over 1500 Finnish companies for the years 2006-2008 and 2008-2010 to explore complementarity of a firm’s R&D strategy with its external knowledge acquisition and innovation collaboration strategies. We define knowledge complementarity (tacit knowledge complementarity) of R&D capabilities to exist when increase in investments in R&D also increases marginal returns from broader external knowledge search (deeper innovation collaboration with external partners). Our estimation results provide support for knowledge complementarity of external R&D. Instead, our data provide no evidence on tacit knowledge complementary of external R&D generally. However, our empirical results concerning the separate types of external R&D suggest that a firm’s acquisition of new technology (i.e., advanced machinery, equipment or software) for innovation purposes appears to be tacit knowledge complementary.

Suggested Citation

  • Koski, Heli & Svento, Rauli, 2014. "Knowledge Complementarity of a Firm’s Internal and External R&D Capabilities," ETLA Working Papers 25, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:wpaper:25
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    References listed on IDEAS

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    More about this item

    Keywords

    open innovation; external knowledge search; complementarity;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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