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The journey towards open innovation: why do firms choose different routes?

Author

Listed:
  • Levan Bzhalava

    (Caucasus University
    Graduate College “The Economics of Innovative Change” (DFG-GK-1411) and Friedrich-Schiller-University Jena)

  • Uwe Cantner

    (Graduate College “The Economics of Innovative Change” (DFG-GK-1411) and Friedrich-Schiller-University Jena
    University of Southern Denmark)

Abstract

Prior research on open innovation provides no systematic insight whether firms with internal innovation constraints increase the scale of R&D outsourcing or the number of innovation cooperation partnerships. Motivated by this research gap in the literature, we study the effect of economic- and knowledge-related innovation impediments on a degree of formal openness in innovation. Analyzing a 3 years panel dataset of German manufacturing firms obtained from Mannheim Innovation Panel (MIP) database, we find that knowledge-related obstacles induce firms to increase the scale of R&D outsourcing as well as to engage in innovation cooperation partnerships. Contrariwise, a non-significant relationship is detected between economic related innovation impediments and R&D openness. Hence, the study suggests that a high degree of openness in innovation is driven by knowledge shortages rather than cost-risk minimization objectives.

Suggested Citation

  • Levan Bzhalava & Uwe Cantner, 2018. "The journey towards open innovation: why do firms choose different routes?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(3), pages 245-265, September.
  • Handle: RePEc:spr:eurasi:v:8:y:2018:i:3:d:10.1007_s40821-017-0101-9
    DOI: 10.1007/s40821-017-0101-9
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    References listed on IDEAS

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