Local and Global Knowledge Complementarity: R&D Collaborations and Innovation of Foreign and Domestic Firms

We analyze how research and development (R&D) collaborations affect product innovation for subsidiaries of foreign multinational firms and domestic firms. We build on the knowledge-based view to propose that subsidiaries and domestic firms differ in their ability to benefit from alternative R&D partners as a result of the variation in their knowledge complementarities. Specifically, we propose that subsidiaries may benefit more from undertaking R&D collaborations with customers and competitors, whose deeper knowledge of local conditions better complements the more global knowledge base of subsidiaries. In contrast, we argue that domestic firms may benefit more from engaging in R&D collaborations with suppliers and universities, whose more global nature of knowledge better complement the deeper local knowledge base of domestic firms.     

Identifying Technology Spillovers and Product Market Rivalry

The impact of R&D on growth through spillovers has been a major topic of economic research over the last thirty years. A central problem in the literature is that firm performance is affected by two countervailing “spillovers” : a positive effect from technology (knowledge) spillovers and a negative business stealing effects from product market rivals. We develop a general framework incorporating these two types of spillovers and implement this model using measures of a firm's position in technology space and productmarket space. Using panel data on U.S. firms, we show that technology spillovers quantitatively dominate, so that the gross social returns to R&D are at least twice as high as the private returns. We identify the causal effect of R&D spillovers by using changes in federal and state tax incentives for R&D. We also find that smaller firms generate lower social returns to R&D because they operate more in technological niches. Finally, we detail the desirable properties of an ideal spillover measure and how existing approaches, including our new Mahalanobis measure, compare to these criteria.     

Acquisition as a means for external technology sourcing: Complementary, substitutive or both?

This paper addresses the question of how a target firm's innovation activities relate to the acquiring firm's R&D characteristics, and more specifically, if the former substitute for, or complement the acquirer's activities. It investigates this question in three narrowly defined high technology industries by analysing the association of three R&D characteristics of acquiring firms with different measures of acquisition extent and content. The R&D characteristics referred to are: addressing R&D efforts, R&D outputs and absorptive capacity. Data was collected in each case for those firms whose combined sales revenue makes up 80% of the industry total and is used to test a set of hypotheses derived from extant literature. The findings confirm a substitutive relationship between acquisitions and acquirer research efforts as well as between acquirer and target patent output, whereas absorptive capacity is complementary to acquisition activities. The results reveal that acquirers target firms that hold a large number of patents in the fields where acquirer patenting is weak, and so address weaknesses in their own R&D output. This finding extends the extant literature on the role of external technology sourcing in the high technology context. Research findings are presented along with their implications and directions for future research.     

The Role of Knowledge in Resource Allocation to Exploration versus Exploitation in Technologically Oriented Organizations*

Decisions regarding research and development (R&D) activities of an organization greatly affect the fiscal and market outcomes of technologically oriented firms. Yet, the resource allocation choices between these two activities are tied strongly to an organization's technology knowledge. Technological knowledge is itself a resource that the firm can manage to achieve strategic and competitive advantage. In this paper, the authors present a system dynamics view of the decomposition of R&D efforts into explorative and exploitive activities and the resultant knowledge‐specific and performance outcomes from the decision to focus on one type of activity or another. Four factors are shown to affect the relative value of innovative knowledge to the organization: resource availability, exogenous competition, aging of knowledge bases, and adaptive capacity, a firm's ability to adapt to its environment. A variety of long‐ and short‐term strategic issues are discussed in relation to these forces.     

创新网络嵌入视角下企业研发竞争的博弈研究

研发投入是创新发展的基础和源泉,如何促进企业研发投入是实施创新驱动战略的关键。本文基于创新网络嵌入的背景,构建同一创新网络内两个企业间的博弈模型,针对不同网络位置企业竞争博弈和相同网络位置企业竞争博弈两种情形,探究在研发竞争状态下企业研发投入受网络地位、网络关系的影响情况。研究结果表明:创新网络嵌入下,同质企业的竞争性研发投入与网络范围的技术溢出、网络平均吸收能力以及网络中心度均存在正向相关关系。研究结论丰富了企业研发投入影响因素的研究成果,也为有效激励企业创新提供一个有价值的思路。     

The impact of service R&D on the performance of Korean information communication technology small and medium enterprises

In recent years, research and development (R&D) in the service industry has attracted a great deal of attention from both academia and industrial firms. However, compared to the manufacturing sector, little research exists on the implications of R&D for the financial and/or non-financial performance of firms in the service industry. The purpose of this study is to examine the impact of service R&D on the performance of information communication technology (ICT) firms. We identify five categories of R&D activities and investigate their impact on the financial and non-financial performance of 100 ICT firms, with a focus on small and medium enterprises (SMEs) in South Korea. We postulate positive relationships between R&D efforts and a firm's performance. However, the findings only partially support our hypotheses; unexpected results demonstrate that the presence of R&D management negatively influences a firm's performance. We present detailed statistical results and discuss the implications of the study.     

Development of absorptive capacity over time and across boundaries: The case of R&D consortia

Absorptive capacity (AC) has been identified as the ability of firms to acquire, assimilate, and apply external knowledge, and thus as a pre-condition for learning from knowledge environment. However, extant literature has focused on AC as (1) a static and (2) a firm-centred concept. In particular, there is little conceptual framing and empirical evidence of how AC develops over time and across boundaries. Taking R&D consortia as the unit of analysis and based on insights from three in-depth case studies of collaborative R&D, our contribution is a framework for AC development over time and across inter-organizational, intra-organizational, and practice boundaries at different stages of collaboration in R&D consortia. Using this framework, we identify a set of mechanisms which enable the development of AC and we discuss the preconditions for these mechanisms. For R&D managers, our research implies that in order to enhance effectiveness of knowledge transfer and learning in R&D consortia they need to develop a strategy that (1) supports learning and AC development throughout the whole cycle of the collaboration, not only by focusing on intra-firm capabilities, but in particular by providing flexible interfaces for overcoming a variety of interaction and learning boundaries between heterogeneous R&D partners, and (2) enables the integration of created and acquired knowledge within the organization once the collaboration is over.     

Internationalization and Indigenous Technological Efforts of Emerging Economy Firms: The Effect of Multiple Knowledge Sources

Getting engaged in competitive international markets motivates exporting firms to enhance their technological competitiveness and invest in research and development (R&D). While in-house R&D investment is important for getting advanced technologies, the technologies needed by exporters located in emerging economies (EEs) typically readily exist overseas. Drawing on organizational learning literature, we argue that the R&D intensity stimulated by exporting may be reduced when 1) EE exporters are better prepared and motivated to absorb foreign knowledge, 2) foreign sources of knowledge are more available, and/or 3) local technology supply is poor. An analysis on 5592 automobile parts and component manufacturers in China during 2005–2007 supports these arguments. To compete in markets abroad, Chinese firms' R&D intensity increases with export intensity when their export intensity is low. As the export intensity exceeds a certain threshold, their R&D intensity starts to decrease as intensive exporters are better prepared and motivated to acquire knowledge from foreign sources. When substitutive foreign knowledge sources such as foreign parents and FDI spillovers in the local industry is available, firms' R&D intensity stimulated by exporting can be further reduced. Better local technology supply can increase the R&D intensity stimulated by exporting.     

How does the combination of R&D and types of knowledge matter for patent propensity?

This paper examines whether the combined effects of R&D efforts and the types of knowledge obtained from the invention process determine patent propensity. With this aim, we investigate a unique, manually collected sample of firms and the Spanish and European Patent Offices to analyze how the combination of R&D and knowledge codifiability, observability and simplicity influence the patent decision. Our results contribute to the literature and assist R&D managers by showing that codified knowledge has a positive impact on patent propensity. Furthermore, we find that knowledge observability and simplicity only influence patent propensity when they are combined with internal R&D expenditures.     

Managing Knowledge Creation in High‐Tech R&D Projects: A Multimethod Study

R&D projects in high‐tech organizations bring together diverse knowledge domains to quickly develop new products and processes. The fast‐paced context of high‐tech organizations makes it challenging to create new knowledge and solve complex problems. Managing these R&D projects requires understanding both the mechanisms and the type of knowledge created to achieve project objectives. This research conducts a two‐phased multimethod study to understand knowledge creation in high‐tech R&D projects. The first phase uses qualitative data to develop a theory on knowledge creation in R&D projects. The second phase involves a survey that collects data from R&D projects to test the theory. Results from the case study find that R&D projects benefit from two types of knowledge – objective and intuitive. The case analyses show that intuitive and objective knowledge creation in high‐tech organizations occurs by creating not only diverse but also psychological safe project teams. The large‐scale survey finds that team diversity positively influences objective knowledge creation while psychological safety affects intuitive knowledge creation. Surprisingly, the results show that team diversity negatively affects intuitive knowledge creation. A post hoc analysis takes a more granular look at diversity and shows that different kinds of diversity have different effects on knowledge creation. This helps to better explain how to manage innovation across boundaries. Finally, the analysis shows that both objective and intuitive knowledge influence R&D project performance. Taken together, these results help explain how to manage innovation across functional boundaries to create knowledge and enhance R&D project performance.      

The antecedents of new R&D collaborations with different partner types: On the dynamics of past R&D collaboration and innovative performance

We examine firms' propensity to adapt their R&D collaboration portfolio by establishing new types of R&D collaboration with different kinds of partners (suppliers, customers, competitors and universities & public research institutions). We argue that existing R&D collaboration with one of the two value chain partners (suppliers or customers) is associated with the formation of new R&D collaboration with the other value chain partner to ensure temporal alignment in innovation within the value chain. In contrast, issues related to governance and unintended knowledge spillovers suggest that ‘horizontal’ R&D collaboration with competitors only spurs R&D collaboration with other partner types if such competitor R&D collaboration has been discontinued earlier (‘delayed temporal alignment’). We posit that persistent prior R&D collaboration with institutional partners is an antecedent to the establishment of new R&D collaboration with industrial partners, and that discontinuation of a particular type of R&D collaboration is likely to lead to a restart of such R&D collaborative effort. Strong prior innovative performance is expected to increase the probability that firms establish R&D collaborations with new partner types, except for R&D collaboration with competitors, since the most innovative firms may fear leakage of proprietary knowledge to rivals. We find broad support for these predictions in a large panel of Spanish innovating firms (2004–2011). Our findings highlight that it is not just the configuration of R&D collaborations with existing partner types that predicts tie formation with new partner types, but also the intertemporal pattern of prior R&D collaboration and managerial discretion provided by past innovation success.     

Technology development control styles in multinational corporations: a case study

Multinational firms tend to geographically disperse their R&D activities to a larger extent than in the past. International R&D seems to play an increasingly important role within the global process of technological innovation taking place in multinational corporations. As a consequence, firms are challenged to design global R&D organisations and manage foreign units playing a central role in their innovation process. A key managerial aspect is the balance between autonomy and control of foreign R&D units. This case study deals with management control styles over foreign R&D units. It is based on the results of an empirical analysis of 16 multinational firms operating in technology-intensive industries. It proposes a taxonomy of management control styles in foreign R&D and gives the cue for further research in the area of technology development control.     

An empirical examination of the science–technology relationship in the biotechnology industry

Understanding how a firm's scientific capability influences its technology development has important implications on the firm's research and development (R&D) strategies. However, the current literature reveals a puzzling outcome in its empirical investigations on the science–technology relationship. While many studies show the positive influence of a firm's scientific capability on its technological performance, a few others indicate that if a firm focuses its attention more on cutting edge science, its overall technological performance will suffer. We suggest that these findings can be reconciled by conceptualizing and measuring the scientific capability of the firm differently. This paper attempts to demonstrate how different notions of scientific capability are associated with different performance outcomes. Furthermore, a firm's scientific capability facilitates the integration of new knowledge to produce valuable technologies when a firm broadens its search for new knowledge. The paper highlights the nuances of conceptualizing and measuring the firm's scientific capability in two different ways: number of scientific publications and non-patent references. The findings also shed light on the mechanism through which science accelerates technological progress inside a firm.     

An empirical analysis of innovation strategies of biotechnology firms in the U.S.

The paper explores the strategies of biotechnology firms in the U.S. through a mail questionnaire study. Based on the responses of 89 companies we have developed strategy archetypes of these firms in R&D, marketing, and technology acquisition. In R&D, we found the firms to follow either incremental or radical strategy. In marketing, the firms use either a defender or an innovator strategy. In technology acquisition, firms differ in terms of their emphasis on licensing or developing new technology. The interrelationship among the strategy groups is weak. The R&D and technology acquisition strategies are related in the sense that aggressive technology strategy dictates radical R&D behavior with emphasis on development of new technology. We have found that firms following aggressive technology strategy tend to follow conservative marketing strategy. This is consistent with an earlier study by of German firms where it was found that firms tend to balance their technical and marketing risks. The paper also provides additional information about the factors considered to be important in product decisions for various strategies.     

Research on Markets for Inventions and Implications for R&D Allocation Strategies

Several streams of literature have examined the phenomenon of “markets for inventions”, that is, the trade of elements of knowledge which are “disembodied” from individuals, organizations, and products. The aims of this paper are to bring together the various streams of research in this area and discuss their major assumptions and limitations, in order to provide a comprehensive framework for understanding the phenomenon, and identify promising paths for future research. We start our review by identifying the object of market exchange—that is, an invention whose knowledge has been codified and disembodied from individuals, organizations, or artifacts. We then identify those factors that enable firms to trade inventions, distinguishing between institutional-, firm-, and industry-level factors. We close our analysis of the extant literature by discussing the implications of markets for inventions for firm behavior and performance. Against this background, we highlight an important avenue for future research. A neglected implication of the development of invention markets is that firms are confronted with a wide variety of technological paths from which to choose, because the opportunity to acquire technologies on the market offers them a greater variety that can their internal R&D departments. However, the streams of research on markets for inventions and on R&D allocation strategies have been surprisingly disconnected so far. Hence, in the final section, we start to establish and explore the link between these literatures, and to identify a research agenda in this domain.     

R&D,productivity, and market value: An empirical study from high-technology firms

Although prior research has addressed the influence of production activity and research and development (R&D) on productivity, it is not clear whether production and R&D affect the market value of a firm. This study proposes and verifies an R&D value chain framework to explore the relationship among productivity, R&D, and firm market values, as measured by Tobin's q theory. By doing so, we attempt to link new theoretical insights and empirical evidence on the effects of R&D efforts and basic production activities to the market valuations of high-technology firms. The value chain data envelopment analysis approach was proposed to estimate parallel-serial processes of basic operations and R&D efforts. This approach can be used to simultaneously estimate the profitability efficiency and marketability efficiency of high-technology firms. This area has rarely been studied, but it is particularly important for high-technology R&D policies and for further industrial development. Using the R&D value chain perspectives of model innovations and extensions proposed in several previous studies, we examined the appropriate levels of intermediate outputs. Production efficiency and R&D were combined to estimate the appropriate levels of intermediate outputs for high-technology firms. Based on the intermediate output analyses, we developed an R&D efforts decision matrix to explore and identify operational and R&D efficiency for high-technology firms. Our sample firms are displayed on a four-quadrant action grid that provides visual information on current short-term operational efficiency and decision making on long-term R&D strategic positions. The empirical findings from the R&D value chain model can provide information for policymakers and managers and suggest the adoption of various policies that place more emphasis on profitability and marketability strategies.     

经济增长和环境质量相容性政策条件——环境技术进步方向视角下的政策偏向效应检验

现有文献关注政策规制的经济与环境绩效,却并未重视不同类型政策的技术偏向,以及技术偏态情境中经济增长和环境质量相容发展的政策条件。本文扩展Acemoglu等(2012)的环境技术进步方向模型,数理演绎不同性质政策的技术偏向,以及技术进步方向转变时经济增长和环境质量的动态演化过程,再结合我国经济数据进行政策效果评价。研究结果发现:(1)环境技术进步方向是技术研发效率和环境政策累积作用的结果,环境政策会通过影响不同类型技术创新激励的方式,改变环境技术进步方向。(2)异质性政策转变技术进步方向,影响经济增长和环境质量,其作用存在不同的着力点和偏向性。其中,研发补贴政策的清洁技术偏向和产出激励效果明显,而规制类政策的环境质量效应优于研发补贴,但其对经济增长的作用表现出非线性U型特征。(3)单一政策干预往往难以破除经济增长和环境质量的两难困境,而政策组合的效果明显优于单一政策,特别是在碳排放权交易试点地区实施研发补贴政策,以及在碳排放权交易试点地区同时实行环境税与研发补贴,效果明显优于实施单一政策。但最优的政策组合并非固定不变,而往往处于动态变化过程中。     

The Distinctive Patterns of Dynamic Learning and Inter‐firm Differences in the Indian Pharmaceutical Industry

Technological or institutional change has proven to be a major cause of the failure of established firms, and history is full of examples. In a globalized world the capability of a firm to reconfigure existing competencies and create new knowledge for innovation has emerged as a dynamic capability to succeed. I examine the learning processes involved in the development of innovative R&D capabilities in Indian pharmaceutical firms as a response to the strengthening of patent law. The strong patent law represented a major institutional change for Indian firms which had grown in a weak patent era. The analysis shows that the development of new capabilities involved the removal of rigidities and the acquisition of new knowledge, and reveals that Indian firms are adopting strategies such as hiring of Indian scientists educated or working overseas in pharmaceutical R&D and collaborative R&D to acquire innovative R&D capabilities. It further points out the inter–intra firm heterogeneity in learning processes and suggests that the move from basic to advance level capabilities is neither linear nor automatic. It requires a deliberate effort and investment by firms in different mechanisms of learning. The Indian pharmaceutical firms' responses provide important insights for firms from other developing countries.     

Exploring the antecedents of potential absorptive capacity and its impact on innovation performance

This paper builds upon the theoretical framework developed by Zahra and George [Absorptive capacity: a review, reconceptualization, and extension. Academy of Management Review 2002;27:185–203] to empirically explore the antecedents of potential absorptive capacity (PAC), i.e. the ability to identify and assimilate external knowledge flows. Based on a sample of 2464 innovative Spanish firms, we find evidence that R&D cooperation, external knowledge acquisition and experience with knowledge search are key antecedents of a firm's PAC. Also, during periods of important internal reshaping, when there are significant changes in strategy, design of the organization and marketing, firms exert more effort to accumulate PAC. Finally, we find that PAC is a source of competitive advantage in innovation, especially in the presence of efficient internal knowledge flows that help reduce the distance between potential and realized capacity.