Captive or non-captive: Knowledge sourcing strategies and innovation performance

Damián Tojeiro-Rivero () and Rosina Moreno ()
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Damián Tojeiro-Rivero: Employment observatory, Department of Economics, University Rovira i Virgili, Spain.
Rosina Moreno: AQR-IREA Research Group, Department of Econometrics, Statistics and Applied Economics, Universitat de Barcelona, Spain.

No 202508, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: Prior literature has argued that, although both captive knowledge sourcing (CKS) and non-captive knowledge sourcing (NCKS) are effective strategies for enhancing firm innovativeness, the former plays a more defined role in determining the likelihood of a firm achieving product innovations. However, we contend that the focus should not only be on the decision to innovate but, more importantly, on the profitability firms derive from such innovations. Given that knowledge acquired from external sources can provide firms with ideas that differ from their existing competencies, NCKS may be more advantageous, as the resulting innovations are likely to exhibit higher levels of novelty. Additionally, we examine the complementarity or substitutability between CKS and NCKS in driving innovation. Our findings for Spanish firms suggest that NCKS yields greater benefits than CKS. Moreover, adopting both strategies simultaneously does not result in higher benefits; instead, a minimum threshold of NCKS, above the median, is necessary to realize observable gains. This indicates that firms must demonstrate a substantial level of commitment to NCKS to effectively exploit its potential for generating returns from their most novel innovations.

Keywords: Radical Innovation, Captive Knowledge Sourcing; Non-Captive Knowledge Sourcing; Spanish firms; Panel data; Complementarity/Substitutability. JEL classification: (search for similar items in EconPapers)
Pages: 41 pages
Date: 2025-01
New Economics Papers: this item is included in nep-tid
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