Determinants of R&D in knowledge-intensive business services firms

ABSTRACT

Research and development (R&D) is a key factor enabling firms to gather information, create knowledge and innovate. Although often seen as the preserve of goods-producing sectors, knowledge-intensive business services (KIBS) in particular also engage in R&D. In this paper, we are interested in understanding the determinants of R&D in KIBS. We address this question by exploring factors connected to R&D in KIBS, with attention to whether it is connected with internal capabilities or to establishments' openness. We show that KIBS' R&D is associated with internal capabilities, and that recourse to external R&D is part of a strategy of openness that complements internal capacity. We also suggest that KIBS's own view of R&D is aligned with R&D in the goods-producing sector, leading establishments in non-technological KIBS sectors to under-report R&D.

KEYWORDS:

• KIBS
• R&D
• open innovation
• Canada

JEL CLASSIFICATION:

• L80
• O32

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The survey was conducted in French. The questionnaire is available upon request.

Additional information

Funding

The authors acknowledge the financial support from the Social Science and Humanities Research Council in Canada [SSHRC 410-2011-0108] and the Telfer School of Management (SMRF research grant) at the University of Ottawa. The usual disclaimers apply.