Sitting on the Fence: Integrating the two worlds of scientific discovery and invention within the firm

Lia Sheer

Research Policy, 2022, vol. 51, issue 7

Abstract: Applying a within-firm perspective to the topic of the division of innovative labor, I explore the organization of scientific discovery at the firm level — specialized or integrated with invention. Using data on inventors and authors related to U.S. publicly-traded science-performing firms for the period 1980–2015, the paper deepens our understanding of the determinants and the tradeoffs associated with the strategic choice of scientific discovery organization. I show that integration is related to a tradeoff between short-term applied R&D and long-term fundamental R&D; while integration is beneficial for invention, it has adverse effects on its scientific output, which decrease invention in the long run. The negative relationship between integration and publication reduces the direct increase in patents due to integration by approximately 90%. To better understand firms’ R&D organizational choice, I present internal and external factors that have implications on the benefits and costs associated with integration: reliance on science, stage of technology, external market for technology, and R&D spillins. Finally, I present consistent implications in terms of market value and show that value creation is related to organizational structure.

Keywords: Corporate research; Division of labor; Innovation; Patents; R&D organizational structure (search for similar items in EconPapers)
JEL-codes: D22 D23 O31 O32 O34 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:51:y:2022:i:7:s0048733322000750

DOI: 10.1016/j.respol.2022.104550

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