Knowledge Complementarity of a Firm’s Internal and External R&D Capabilities

Koski HeliSvento Rauli

We use data from over 1500 Finnish companies for the years 2006-2008 and 2008-2010 to explore complementarity of a firm’s R&D strategy with its external knowledge acquisition and innovation collaboration strategies. We define knowledge complementarity (tacit knowledge complementarity) of R&D capabilities to exist when increase in investments in R&D also increases marginal returns from broader external knowledge search (deeper innovation collaboration with external partners). Our estimation results provide support for knowledge complementarity of external R&D. Instead, our data provide no evidence on tacit knowledge complementary of external R&D generally. However, our empirical results concerning the separate types of external R&D suggest that a firm’s acquisition of new technology (i.e., advanced machinery, equipment or software) for innovation purposes appears to be tacit knowledge complementary.

Publication info

Series
ETLA Working Papers 25
Date
06.08.2014
Keywords
open innovation, external knowledge search, complementarity
ISSN
2323-2420 , 2323-2439
JEL
D83, O3, L2
Pages
30
Price
15 €
Availability of print version
Available
Language
English