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Complementarity between internal knowledge creation and external knowledge sourcing in developing countries

Author

Listed:
  • Hou, Jun

    (UNU-MERIT/MGSoG)

  • Mohnen, Pierre

    (UNU-MERIT/MGSoG, and Maastricht University)

Abstract

In developing countries, innovation is to a large extent a matter of adoption of advanced technologies but also of conducting internal R&D to be able to better assimilate existing technologies. This paper, based on firm level data from 24 developing countries, examines the roles of internal R&D efforts (MAKE) and external technology sourcing (BUY) in fostering productivity in manufacturing firms. Is MAKE a substitute for BUY or are the two strategies complementary as evidenced in some developed countries? Our empirical investigation highlights the critical role of external technology acquisition in manufacturing industries in low-income countries and exhibits signs of complementarity only in middle-income countries.

Suggested Citation

  • Hou, Jun & Mohnen, Pierre, 2013. "Complementarity between internal knowledge creation and external knowledge sourcing in developing countries," MERIT Working Papers 2013-010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2013010
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    File URL: https://www.merit.unu.edu/publications/wppdf/2013/wp2013-010.pdf
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    References listed on IDEAS

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    Cited by:

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    2. repec:ipg:wpaper:2014-488 is not listed on IDEAS

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    More about this item

    Keywords

    innovation; make and buy; complementarity; developing countries;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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