Knowledge Complementarity of a Firm’s Internal and External R&D Capabilities

Heli Koski and Rauli Svento

No 25, ETLA Working Papers from The Research Institute of the Finnish Economy

Abstract: We use data from over 1500 Finnish companies for the years 2006-2008 and 2008-2010 to explore complementarity of a firm’s R&D strategy with its external knowledge acquisition and innovation collaboration strategies. We define knowledge complementarity (tacit knowledge complementarity) of R&D capabilities to exist when increase in investments in R&D also increases marginal returns from broader external knowledge search (deeper innovation collaboration with external partners). Our estimation results provide support for knowledge complementarity of external R&D. Instead, our data provide no evidence on tacit knowledge complementary of external R&D generally. However, our empirical results concerning the separate types of external R&D suggest that a firm’s acquisition of new technology (i.e., advanced machinery, equipment or software) for innovation purposes appears to be tacit knowledge complementary.

Keywords: open innovation; external knowledge search; complementarity (search for similar items in EconPapers)
JEL-codes: D83 L2 O3 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2014-08-06
New Economics Papers: this item is included in nep-acc, nep-cse, nep-eur, nep-ino, nep-knm and nep-tid
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