Knowledge stocks, knowledge flows and innovation: Evidence from matched patents and innovation panel data

Stephen Roper and Nola Hewitt-Dundas

Research Policy, 2015, vol. 44, issue 7, 1327-1340

Abstract: Successful innovation depends on knowledge – technological, strategic and market related. In this paper we explore the role and interaction of firms’ existing knowledge stocks and current knowledge flows in shaping innovation success. The paper contributes to our understanding of the determinants of firms’ innovation outputs and provides new information on the relationship between knowledge stocks, as measured by patents, and innovation output indicators. Our analysis uses innovation panel data relating to plants’ internal knowledge creation, external knowledge search and innovation outputs. Firm-level patent data is matched with this plant-level innovation panel data to provide a measure of firms’ knowledge stock. Two substantive conclusions follow. First, existing knowledge stocks have weak negative rather than positive impacts on firms’ innovation outputs, reflecting potential core-rigidities or negative path dependencies rather than the accumulation of competitive advantages. Second, knowledge flows derived from internal investment and external search dominate the effect of existing knowledge stocks on innovation performance. Both results emphasize the importance of firms’ knowledge search strategies. Our results also re-emphasize the potential issues which arise when using patents as a measure of innovation.

Keywords: Innovation; Knowledge stocks; Patents; Ireland (search for similar items in EconPapers)
JEL-codes: O31 O32 O34 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (69)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:44:y:2015:i:7:p:1327-1340

DOI: 10.1016/j.respol.2015.03.003

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