IDEAS home Printed from
   My bibliography  Save this article

A note on testing for complementarity and substitutability in the case of multiple practices


  • Martin Carree


  • Boris Lokshin
  • René Belderbos


Recent empirical studies of firm-level performance have tested complementarity in the case of multiple practices. These papers have drawn conclusions using potentially biased estimates of pair-wise interaction effects. We develop a consistent and simple testing framework and test it against alternatives.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Martin Carree & Boris Lokshin & René Belderbos, 2011. "A note on testing for complementarity and substitutability in the case of multiple practices," Journal of Productivity Analysis, Springer, vol. 35(3), pages 263-269, June.
  • Handle: RePEc:kap:jproda:v:35:y:2011:i:3:p:263-269
    DOI: 10.1007/s11123-010-0189-8

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    1. Giovanni Maggi & Gene M. Grossman, 2000. "Diversity and Trade," American Economic Review, American Economic Association, vol. 90(5), pages 1255-1275, December.
    2. Mohnen, Pierre & Roller, Lars-Hendrik, 2005. "Complementarities in innovation policy," European Economic Review, Elsevier, vol. 49(6), pages 1431-1450, August.
    3. Susan Athey & Scott Stern, 2002. "The Impact of Information Technology on Emergency Health Care Outcomes," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 399-432, Autumn.
    4. Keld Laursen & Nicolai J. Foss, 2003. "New human resource management practices, complementarities and the impact on innovation performance," Cambridge Journal of Economics, Oxford University Press, vol. 27(2), pages 243-263, March.
    5. James Love & Stephen Roper, 2009. "Organizing the Innovation Process: Complementarities in Innovation Networking," Industry and Innovation, Taylor & Francis Journals, vol. 16(3), pages 273-290.
    6. Leiponen, Aija, 2005. "Skills and innovation," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 303-323, June.
    7. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 339-376.
    8. René Belderbos & Martin Carree & Boris Lokshin, 2006. "Complementarity in R&D Cooperation Strategies," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(4), pages 401-426, June.
    9. Galia, Fabrice & Legros, Diego, 2004. "Complementarities between obstacles to innovation: evidence from France," Research Policy, Elsevier, vol. 33(8), pages 1185-1199, October.
    10. Arora, Ashish, 1996. "Testing for complementarities in reduced-form regressions: A note," Economics Letters, Elsevier, vol. 50(1), pages 51-55, January.
    11. repec:dau:papers:123456789/10093 is not listed on IDEAS
    12. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
    13. Wolak, Frank A., 1989. "Local and Global Testing of Linear and Nonlinear Inequality Constraints in Nonlinear Econometric Models," Econometric Theory, Cambridge University Press, vol. 5(01), pages 1-35, April.
    14. Susan Athey & Scott Stern, 1998. "An Empirical Framework for Testing Theories About Complimentarity in Organizational Design," NBER Working Papers 6600, National Bureau of Economic Research, Inc.
    15. Wolak, Frank A., 1989. "Testing inequality constraints in linear econometric models," Journal of Econometrics, Elsevier, vol. 41(2), pages 205-235, June.
    16. Catozzella, Alessandra & Vivarelli, Marco, 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).
    17. Gourieroux, Christian & Holly, Alberto & Monfort, Alain, 1982. "Likelihood Ratio Test, Wald Test, and Kuhn-Tucker Test in Linear Models with Inequality Constraints on the Regression Parameters," Econometrica, Econometric Society, vol. 50(1), pages 63-80, January.
    18. Casey Ichniowski & Kathryn Shaw & Giovanna Prennushi, 1995. "The Effects of Human Resource Management Practices on Productivity," NBER Working Papers 5333, National Bureau of Economic Research, Inc.
    19. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence from A Panel of British and French Establishments," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1449-1492.
    20. Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-1248, September.
    21. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-528, June.
    22. N. E. Savin, 1980. "The Bonferroni and the Scheffé Multiple Comparison Procedures," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 255-273.
    23. Arora, Ashish & Gambardella, Alfonso, 1990. "Complementarity and External Linkages: The Strategies of the Large Firms in Biotechnology," Journal of Industrial Economics, Wiley Blackwell, vol. 38(4), pages 361-379, June.
    24. Brian Cozzarin & Jennifer Percival, 2006. "Complementarities between organisational strategies and innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(3), pages 195-217.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Spyros Arvanitis & Boris Lokshin & Pierre Mohnen & Martin Woerter, 2015. "Impact of External Knowledge Acquisition Strategies on Innovation: A Comparative Study Based on Dutch and Swiss Panel Data," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(4), pages 359-382, June.
    2. Stéphane Lhuillery & Julio Raffo & Intan Hamdan-Livramento, 2016. "Measuring creativity: Learning from innovation measurement," WIPO Economic Research Working Papers 31, World Intellectual Property Organization - Economics and Statistics Division.
    3. Resende, Marcelo & Strube, Eduardo & Zeidan, Rodrigo, 2014. "Complementarity of innovation policies in Brazilian industry: An econometric study," International Journal of Production Economics, Elsevier, vol. 158(C), pages 9-17.
    4. repec:enr:rpaper:0006 is not listed on IDEAS
    5. repec:kap:jtecht:v:42:y:2017:i:3:d:10.1007_s10961-015-9435-6 is not listed on IDEAS
    6. Caroline Mothe & Uyen T. Nguyen-Thi & Phu Nguyen-Van, 2015. "Assessing complementarity in organizational innovations for technological innovation: the role of knowledge management practices," Applied Economics, Taylor & Francis Journals, vol. 47(29), pages 3040-3058, June.
    7. Zand, Fardad & Van Beers, Cees & Van Leeuwen, George, 2011. "Information technology, organizational change and firm productivity: A panel study of complementarity effects and clustering patterns in Manufacturing and Services," MPRA Paper 46469, University Library of Munich, Germany.
    8. Susanna Mancinelli & Rosa Bernardini Papalia & Silvia Bertarelli, 2015. "Complementarity among innovations for exporting in German manufacturing firms," Working Papers 2015044, University of Ferrara, Department of Economics.
    9. Gilli, Marianna & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Innovation complementarity and environmental productivity effects: Reality or delusion? Evidence from the EU," Ecological Economics, Elsevier, vol. 103(C), pages 56-67.
    10. Caroline Mothe & Uyen T. Nguyen-Thi & Phu Nguyen-Van, 2014. "Are organizational innovation practices complements or substitutes for technological innovation performance?," Working Papers of BETA 2014-12, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    11. Love, James H. & Roper, Stephen & Vahter, Priit, 2014. "Dynamic complementarities in innovation strategies," Research Policy, Elsevier, vol. 43(10), pages 1774-1784.
    12. Müller, Bettina & Murmann, Martin, 2016. "The workforce composition of young firms and product innovation: Complementarities in the skills of founders and their early employees," ZEW Discussion Papers 16-074, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    13. Yu, Li & Hurley, Terrance & Kliebenstein, James & Orazem, Peter, 2012. "A test for complementarities among multiple technologies that avoids the curse of dimensionality," Economics Letters, Elsevier, vol. 116(3), pages 354-357.
    14. Lorena M. D'Agostino & Grazia D. Santangelo, 2012. "The Global Fragmentation of R&D Activities: The Home Region Perspective," DRUID Working Papers 12-06, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    15. An, Henry, 2012. "Complementarities in Production Technologies: An Empirical Analysis of the Dairy Industry," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124653, Agricultural and Applied Economics Association.
    16. Caroline Mothe & Thu Nguyen Nguyen Thi & Phu Nguyen-Van, 2015. "Complementarities in organizational innovation practices: evidence from French industrial firms Complementarities in organizational innovation practices: evidence from French industrial firms," Post-Print hal-01293802, HAL.
    17. repec:ipg:wpaper:2014-488 is not listed on IDEAS
    18. Crass, Dirk & Peters, Bettina, 2014. "Intangible assets and firm-level productivity," ZEW Discussion Papers 14-120, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item


    Complementarity; Supermodularity; Firm performance; C12; D24;

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jproda:v:35:y:2011:i:3:p:263-269. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.