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Internal R&D and External Knowledge Acquisition of Start-up Firms: Exploring the Role of Entrepreneurial Human Capital

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  • Masatoshi Kato

    () (School of Economics, Kwansei Gakuin University)

Abstract

This study explores internal research and development (R&D) and external knowledge acquisition of firms during the start-up period, using panel data from original questionnaire surveys conducted in Japan. In particular, the study highlights the role of entrepreneurial human capital in the adoption of internal R&D and external knowledge acquisition strategies (licensing-in and joint R&D). Based on estimates of a bivariate probit model, the analysis provides evidence that firms managed by entrepreneurs with a high level of human capital are more likely to engage both in internal R&D and external knowledge acquisition. More specifically, while generic human capital, such as educational attainment, plays a significant role in explaining internal R&D, specific human capital, such as prior work experience in a related field or innovation experience, tends to have a prominent influence on external knowledge acquisition. As a supplementary analysis, the effectiveness of internal R&D and external knowledge acquisition strategies is assessed by examining the link with innovation outcomes (product innovations and patent applications). The results suggest that the two innovation strategies have positive effects on innovation outcomes.

Suggested Citation

  • Masatoshi Kato, 2016. "Internal R&D and External Knowledge Acquisition of Start-up Firms: Exploring the Role of Entrepreneurial Human Capital," Discussion Paper Series 145, School of Economics, Kwansei Gakuin University, revised Jul 2016.
  • Handle: RePEc:kgu:wpaper:145
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    Keywords

    Start-up; entrepreneur; internal R&D; external knowledge acquisition; generic human capital; specific human capital;

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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