 How does basic research improve innovation performance in the world’s major pharmaceutical firms?Bart Leten, Stijn Kelchtermans and Rene Belderbos Industry and Innovation, 2022, vol. 29, issue 3, 396-424 Abstract: Employing a panel (1995–2015) of large R&D spending pharmaceutical firms, we investigate how internal basic research increases a firm’s innovative performance. We disentangle two mechanisms through which internal basic research affects technology development: (1) as strengthening of the firm’s absorptive capacity to build on externally conducted science, and (2) as a direct source of the firm’s innovation. We find that the positive relationship between internal basic research and innovation performance is significantly mediated by these two mechanisms, with the absorptive capacity mechanism relatively more important. The mediation relationships are more pronounced in recent years, with basic research as a direct source of innovation increasing in importance. This pattern is associated with a decline of corporate investments in basic research over time, and suggests that firms have adopted a more judicious and targeted approach to basic research aimed at getting more leverage out of a smaller commitment to basic research. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:indinn:v:29:y:2022:i:3:p:396-424 Ordering information: This journal article can be ordered from DOI: 10.1080/13662716.2021.1997723 Access Statistics for this article Industry and Innovation is currently edited by Associate Professor Mark Lorenzen More articles in Industry and Innovation from Taylor & Francis Journals |
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