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Doing R&D in a closed or open mode: Dynamics and impacts on productivity

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  • Rosa, Julio Miguel

    ()
    (Industry Canada, Economic Research and Policy Analysis Branch)

  • Mohnen, Pierre

    ()
    (UNU-MERIT / MGSoG, and CIRANO)

Abstract

On the one hand, firms prefer to perform R&D in an open mode (letting R&D be performed extramurally or even selling their R&D services) to benefit from knowledge spillovers and complementarities between internal and external R&D. On the other hand, they may also like to perform R&D in a closed mode (funding and executing their R&D intramurally) to minimize outgoing externalities. We examine the dynamic process by which firms change the way of doing R&D and how these strategic choices of doing R&D affect their productivity growth. This study is based on the Statistics Canada Research and Development in Canadian Industry survey (RDCI), which collects data on R&D performed in the business sector in Canada. The paper is based on data for the period 1997 to 2006. The panel dimension of the data allows to control for unobserved characteristics of R&D performers by estimating a multinomial Logit model with unobserved heterogeneities using maximum simulated likelihood (MSL) method.

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Paper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 060.

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Date of creation: 2013
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Handle: RePEc:unm:unumer:2013060

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Keywords: R&D; State Dependence; Dynamic Multinomial Logit; Panel-data; Maximum Simulated Likelihood; Open Innovation;

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