In-house R&D, external R&D and cooperation breadth in Spanish manufacturing firms: is there a synergistic effect on innovation outputs?

ABSTRACT

This study explores the nature of relationship between in-house R&D, external R&D and cooperation breadth and their joint impact on patent counts as well as technological, product and process, innovations in Spanish manufacturing firms. With regards to patent counts, empirical findings from a Generalized Method of Moments (GMM) estimator suggest a complementarity effect of internal and external R&D activities conditional on the breadth of R&D cooperation. Concerning technological innovation, results from dynamic random-effects probit models indicate no synergistic effects. In addition, we find evidence of persistence of all three innovation output measures. Our results suggest policy implications in relation to strengthening firms’ absorptive capacity that could have long-run effects.

KEYWORDS:

• Internal and external R&D
• cooperation breadth
• complementarity
• dynamic panel analysis
• Spanish manufacturing

JEL CODES:

• O31
• O32
• O38
• Q55

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Dragana Radicic http://orcid.org/0000-0002-7118-0737

Merima Balavac http://orcid.org/0000-0002-3166-7137

Notes

1 Technological capabilities are considered an important component of absorptive capacity, and a key driver in a successful introduction of product innovation (Moorman and Slotegraaf 1999; Wu 2014).

2 However, these studies only report coefficients on the three-way interactions, while marginal effects are neither reported nor interpreted.

3 The correlation between error terms in, for instance, bivariate and multivariate categorical models is interpreted as an evidence of complementarity (Schmiedeberg 2008).

4 For more information, see https://www.fundacionsepi.es/.

5 The SME definition by the European Commission is slightly different, using the headcount of 250 employees as an upper bound.

6 In contrast to true state dependence, spurious persistence occurs when observed and unobserved firm characteristics that persist over time affect the likelihood of innovation output in the subsequent period.

7 The difference between average marginal effects for product and process innovation is not statically significant at any conventional level.

8 As a robustness check, we estimated a model with both concurrent and lagged effects of the variables of interest. The results are qualitatively the same as in the models reported in the study. The results are available on request.

9 Following the Innovation Scoreboard, countries in this group have innovation performance below of the EU27 average. Spain belongs to this group according to all published Innovation Scoreboard reports from 2007 to 2018 (see http://ec.europa.eu/growth/industry/innovation/facts-figures/scoreboards_en).