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How does openness affect the importance of incentives for innovation?

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  • Fu, Xiaolan

Abstract

When firms open up to external resources for innovation, do internal incentives still matter? This paper investigates the moderating effect of open innovation on the relationship between incentives and innovation using a survey database of British firms. Whilst both openness and incentives are positively associated with innovation efficiency, a substitution effect is found between openness and incentives. Whilst long-term incentives appear to enhance efficiency to a greater extent than short-term incentives, the substitution effect of openness is stronger regarding long-term incentives.

Suggested Citation

  • Fu, Xiaolan, 2012. "How does openness affect the importance of incentives for innovation?," Research Policy, Elsevier, vol. 41(3), pages 512-523.
    • Handle: RePEc:eee:respol:v:41:y:2012:i:3:p:512-523
    DOI: 10.1016/j.respol.2011.12.011
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    More about this item

    Keywords

    Incentives; Open innovation; Innovative efficiency;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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