Beyond absorptive capacity: in-house R&D as a driver of innovative complementarities

Abstract

This article shows how in-house R&D may play a role in affecting innovative output beyond its direct impact and its indirect effect through absorptive capacity, generating additional synergies that amplify the impacts of innovative inputs other than R&D itself.

Keywords:

• R&D
• innovation
• complementarity

JEL Classification:

• O31

Notes

¹ The authors thank the ADELE Laboratory at ISTAT for providing the data.

² For details about the data set and the variables used in this study, see Catozzella and Vivarelli (2007; Section III). In particular, the set of controls (Z), included in the econometric estimates run as preliminary steps to the tests provided in the following Sections III and IV, comprises firm’s size, sectoral belonging, business group belonging, investment, export, product market extent, participation to cooperative innovative activities, public subsidy, perceived hurdles to innovation, appropriability conditions, organizational change, information sources.

³ We first regressed logTurninn on a set of state dummies S_ijkl uniquely identifying the 16 input combinations (while checking for firm’s characteristics and industry effects). The nature of the adopted dependent variable, only accounting for the intensity of product innovation, made it necessary to drop firms realizing process innovations only, thus generating a selection bias. The corresponding Heckman-corrected estimates are shown in Catozzella and Vivarelli (2007), Table 12 (p. 35).

⁴ This effect is unique to R&D and not the consequence of imposing a minimum threshold level on any innovative input (see Catozzella and Vivarelli, 2007, Table A1, showing no evidence of any pivotal role of MAC in generating complementarities).