The Catalysing Role of In-House R&D in Fostering Complementarity Among Innovative Inputs

While several studies have investigated the relationship between internal and external sources of innovation, no clear-cut result has emerged so far, suggesting the possibility that the nature of such interaction—far from being an absolute property of the innovative process—may instead be a relative one, contingent upon the nature and the level of innovative inputs a firm has invested in. Using microdata from the third Italian Community Innovation Survey, we test under what conditions the nature of the interactions between four different innovative inputs (internal and external R&D, embodied and disembodied technological acquisition) is one of complementarity or substitutability. Two are the main findings of our study: (i) internal R&D and embodied technological acquisitions turn out to be complementary only after a minimum threshold of in-house R&D expenditure has been overcome, being substitutive otherwise; (ii) investing in internal R&D also affects the nature of the relationships between alternative external sources of innovation, whose interaction proves to be complementary only for firms that invest in internal R&D.     

Do R&D Spinoffs have Higher R&D Productivity? Evidence from Taiwanese Electronics Firms

The startup mode of spinoffs founded by R&D employees (R&D spinoffs) within the same industry is widespread in high-tech industries. The founders usually own specific human capital and key technological capability, enabling them to take the operational risk and to appropriate rewards of innovations under the industrial environment of rapid technological change. Whether high-tech R&D spinoffs, compared to their other spinoff counterparts, have better R&D productivity remains less well explored. According to the conceptual discussion of the advantages of intangible innovation assets embodied in company founders, this study argues that the founders' innovation cognition, knowledge externalities, absorptive capability and routine experience can help R&D spinoffs to have higher R&D productivity. We thus propose three hypotheses that are then empirically tested. Based on a sample of Taiwanese electronics firms, the empirical findings show that R&D spinoffs invest with a higher R&D intensity and on average have more patents issued. More importantly, the microeconometric estimates show that the patent and output elasticities of the R&D of R&D spinoffs are significantly higher than those of other firms, indicating that they actually have higher R&D productivity.     

R&D policy instruments – a critical review of what we do and don’t know

In recent years, the term “policy instrument” has been used frequently with regard to R&D policy and innovation policy. This article examines the development of the term as part of a body of research known as “policy design”. Over the last 50 years, there has been substantial progress in setting policy design on a more systematic basis, with the development of established concepts and analytical frameworks, including various taxonomies of policy instruments. However, with just a few exceptions, this body of research seems to have had little impact in the world of R&D policy. The paper reviews the literature on R&D policy instruments, identifies a number of challenges for R&D policy instruments in the light of four transitions and sets out a research agenda for the study of R&D policy instruments, before ending with a number of conclusions.     

R&;D market value under weak intellectual property rights protection: the case of India

The relationship between R&D and market value has attracted the interest of many scholars within different fields, but scant attention has been paid to the countries with weak protection of intellectual property rights (IPR). This is unfortunate, since this problem is potentially highly relevant for IPR policy in developing countries. In particular, several questions arise when the problem of R&D market value is analyzed in a country where IPR protection is weak. First, there are concerns regarding incentives (i.e., private returns) for firms to invest in R&D when IPR is only weakly protected. Second, significant differences could emerge in the market valuation of R&D investments of domestic and foreign firms, above all in those industries where spillovers are more likely. To examine these issues, this paper investigates the market valuation of R&D investments of a panel of 219 R&D-reporting domestic and foreign firms publicly traded in India with an empirical analysis. First, the market valuation of the R&D capital for the whole sample is positive and higher than those obtained in U.S. or European countries from similar analyses. Second, in the sub-samples of the domestic and foreign firms, the market value of R&D investments of foreign firms is not significantly different from zero, while the valuation coefficient of domestic firms is four times higher than that obtained on the whole sample. Third, in science-based industries the difference between domestic and foreign firms is smaller than in the other industries. The policy implications of these findings are discussed.     

Optimal R&D investments of the firm

This paper examines irreversible decisions on innovative activities where it takes time to complete an R&D project. The total amount of R&D investments that the firm needs to undertake in order to obtain the breakthrough in the innovation process is uncertain. R&D investments are limited by the restriction that they must be self-financed. It is shown that R&D investments are more valuable when the level of uncertainty is large. Especially, it is very attractive to undertake R&D investments if a project faces many uncertainties during its early phases. Furthermore we study how R&D behavior is influenced by different levels of the discount rate and the financing limit. Moreover, the effects of R&D subsidies, spillover benefits and a payoff that decreases over time are analyzed. Received: 9 October 1997 / Accepted: 19 March 1998     

Economic crisis and company R&D in Spain: do regional and policy factors matter?

The economic crisis which began in 2008 has had a far-reaching impact, including effects on the innovation behaviour of firms. Many companies have reduced their innovation-related activities, although some firms have been more resilient than others. Using a representative microdata panel of Spanish firms, we study the probability of companies abandoning in-house R&D during the crisis and its relationship to regional and policy factors. We find significant regional heterogeneity related to regional economic size and the type of the regional innovation system; regional government R&D support only reduces R&D abandonment rates in regions where a strong system of knowledge exploitation is in place.     

Is there a fallacy of composition of external R&D? An empirical assessment of the impact of quasi-internal,external and offshored R&D

Empirical studies at the individual firm level often find a positive impact of external R&D on innovation. However, external R&D sourcing might produce an impoverishment of the local knowledge base and thus damage innovation production at the regional level. To address this possible fallacy of composition, we first review the various forms of ‘external’ R&D. We then use the French R&D survey to assess the impact of four different ways of transacting or collaborating on R&D: onshore affiliate external R&D, offshore affiliate external R&D, onshore non-affiliate and offshore non-affiliate external R&D. We then estimate knowledge production functions on the 94 metropolitan French NUTS3 regions observed between 1997 and 2008, differentiating internal R&D and these categories of external R&D. We obtain that the impact of onshore non-affiliate external R&D is significantly negative. The other external R&D categories are non-significant and we do not detect any complementarity between internal and external R&D.     

Using patents and publications to assess R&D efficiency in the states of the USA

Even with the USA spending the largest amounts in R&D, its share in total patent grants worldwide has been declining. This decline is also evident in its share of world scientific publications. These developments have been termed by some as the “American Paradox”. Extant research on R&D efficiency and technological innovation capability has considered the USA as a homogeneous entity and has not focused at the sub-national level. This paper analyses the R&D efficiency of 50 US states and the District of Columbia. R&D efficiency is calculated as the ratio of patents granted and scientific publications to R&D expenditures. Only 14 states out of the 51 regions are found to exhibit positive changes in R&D efficiency between 2004 and 2008. Comparing this performance with that of the BRICS nations over the same period we find that Brazil, India, China and South Korea show significant improvements in R&D efficiency with India taking the lead. This research identifies the states in the US with the highest R&D efficiency and presents benchmarks which can be followed by policy interventions. The paper highlights the importance of conducting analyses of R&D efficiency using patents and publications at the sub-national level for informed policy making.     

An Exploration of Total Quality Management Practices In U.S. R&D Organizations

ABSTRACT

This article presents the findings of an exploratory study of total quality management (TQM) practice in selected U.S. R&D organizations. Information was obtained through a nationwide survey of 31 R&D organizations and interviews with 13 R&D organization directors. Research questions are posed through a review of the related literature, and the research method is described. The current state of TQM practice in the surveyed organizations is elaborated, and special attention is given to TQM-related performance measurement. It is shown that under TQM, the perceived success of the R&D organization is a function of the metric being used for assessment and the degree to which measurement occurs. Research topic areas for further study are also proposed.     

Optimal diversification for R&;D project portfolios

Diversification of R&D projects not only can reduce overall risk, but also can create value-enhancement effect. A useful guideline for optimal diversification of R&D projects is important to R&D organizations. This paper extends financial portfolio analyses for R&D management particularly incorporating the technology risk. This study uses a survival model to describe the technology risk since termination of an R&D project can be caused by any technology risk factors. A formula of optimal R&D resource allocation that can dynamically achieve the greatest diversification effect is offered. Furthermore we provide an alternative method for estimating correlations between R&D portfolios, which has a critical influence on diversification effect. The method can be useful in risk assessment when measure the exposure of R&D portfolio to particular sources of uncertainty. The evaluation framework for R&D portfolios optimization also can be applied in project-selection decisions.     

Are significant inventions more diversified?

This study aims at exploring whether significant inventions are more technologically diversified or have more diverse applications, investigating whether there are any innovation laws existing in R&D activities. Based on technology co-classification analysis, we select patent dataset meets the specific standard from the worldwide patent database named Derwent Innovations Index as sample dataset. Three indicators out of four verify the proposed hypotheses, i.e., significant inventions are more diversified in terms of individual invention. The fourth indicator implies that focusing on some core technology domains maybe better for creating significant inventions when R&D activities are considered as a whole. The results are of great theoretical significance by helping us identifying the diversified characteristic laws of significant inventions; moreover, they are of crucial practical meanings to R&D work and technology innovation activities etc.     

R&D,Value Chain Location and Firm Performance in the Global Electronics Industry

In today's global electronics industry, innovation is carried out by various value chain participants, including brand-name manufacturers (sometimes called lead firms), contract manufacturers and component suppliers, but there is little understanding of who benefits most from innovation in such networks. This research examines empirically the relationship of R&D spending and location in the value chain (lead vs. non-lead firms) to firm performance in the global electronics industry by using the Electronic Business 300 data set for 2000–2005. Our results show that firms spending more on R&D have higher gross profits, but do not have higher return on equity (ROE) and return on assets (ROA). There is a strong positive relationship between lead firms and performance as measured by gross profit, ROE and ROA, but the relationship between lead firms and gross profit becomes insignificant when the interaction term of R&D and lead firm is included in the analysis. Finally, lead firm status has a positive interaction effect on the relationship between R&D and gross profit. These findings suggest that the relationship of R&D to performance is mixed, but that lead firms can capture higher value (gross profit) from R&D than contract manufacturers and component suppliers.     

Spatial spillovers and value chain spillovers: evaluating regional R&D efficiency and its spillover effects in China

Research and development (R&D) efficiency assessment is an effective way for policymakers to develop strategies to increase the beneficial impacts of R&D. This study measures regional R&D efficiency from a multi-stage R&D perspective. It examines the spatial spillover effects and value chain spillover effects of R&D using panel data from 2009 to 2016 for 30 provinces in China. By estimating a spatial Durbin model, we find evidence of strong spatial dependence in R&D efficiency in China. With respect to R&D value chain effects, we find that R&D value chain spillovers took place intra-regionally but not inter-regionally. This finding indicates that in a knowledge flow context, there are two-way R&D value chain spillovers in which the forward spillover effects are stronger than the backward spillover effects. This finding adds important new knowledge to research on knowledge spillovers: distinguishing between value chain spillovers and spatial spillovers opens new avenues for future empirical inquiries.

     

Once bitten,less shy? The influence of prior misappropriation experience on R&D collaboration

Firms often face the challenge of collaborating for innovation and protecting themselves from misappropriation. Given this tension, we investigate the relationship between prior misappropriation of protected and unprotected intellectual property (IP) and R&D collaboration. We combine more than 600 firm observations from the German Community Innovation Survey with patent data and qualitative interview data. Our results consistently point to (1) less subsequent R&D collaboration after being copied (misappropriation of unprotected IP) and (2) more subsequent R&D collaboration after being infringed (misappropriation of protected IP) in the following three years. Moreover, we find indication that firms that are copied start to collaborate more during the subsequent period (four to six years later). Our study adds to a better understanding of the tension between appropriating innovation rents and remaining open to R&D collaboration. Further, we provide insights on how firms strategically leverage previous misappropriation experience to create value.     

Firm growth and R&D investment: SVAR evidence from the world’s top R&D investors

Understanding causal relationships among key economic variables is crucial for policy makers, who wish to e.g. stimulate private R&D growth. To this end, we applied a technique recently imported from the Machine Learning community (Structural Vector Autoregressions (SVARs) identified using Independent Components Analysis (ICA)) to a data-set of the world’s largest R&D investors. Our analysis highlights the key role of firm growth in the areas of employment and sales, rather than growth of profits or market capitalization, in stimulating R&D growth. R&D growth appears toward the end of the causal ordering of the growth process. Our results suggest that policies to increase private R&D would do better to target growth of sales and employment rather than market capitalization or profits.     

The impact of R&;D collaboration on innovative performance in Korea: A Bayesian network approach

It is well known from previous research activities that R&D collaboration among economic actors for knowledge production is very important. An accompanying analysis of the impact of R&D collaboration on innovative performance has to be conducted for transferring knowledge to the globalized knowledge-based economy. When we first investigated previous research concerning R&D collaboration, we found some limitations in the analysis methodology. In order to overcome these limitations in previous research, we applied a Bayesian network for analyzing the impact of R&D collaboration in Korean firms on their innovative performance.     

A Business Intelligence Approach to Monitoring and Trend Analysis of National R&D Indicators

The economic growth and competitiveness of countries is strongly influenced by their national research and development (R&D) systems. Hence, national R&D managers must make appropriate decisions to develop their R&D systems. For this purpose, an integrated view on the dimensions of national R&D systems is much needed. Due to the distribution of relevant data sources for national, R&D indicators and the complexity of national R&D systems, establishing an integrated view is challenging. In this article, we propose a business intelligence architecture to monitor, analyze, and forecast national, R&D indicators. Data for these indicators are integrated from heterogeneous data sources. In a case study focusing on Iranian R&D indicators, a prototype system is designed and implemented to evaluate its effectiveness in practice. After monitoring the indicators using online analytical processing, trends for the indicators across 11 years are forecasted using time series analysis models. The prototype system provides an integrated view of the Iranian R&D system, so that national R&D managers can use the developed system for monitoring and trend analysis of Iranian R&D indicators. As a result of the analysis of these trends, implications and recommendations for the future of the Iranian R&D system are presented.     

The role of government-industry-academia partnership in business incubation: Evidence from new R&D institutions in China

it is very important to encourage the incubation of new companies for innovative economic growth. Many countries in the world are encouraging “innovation orchards” in the form of government-industry-academia partnership to facilitate the incubation of new technology enterprises. The research focuses on the impact of this partnership between the government, industry, and academia in establishing new R&D institutions on business incubation. Specifically, the research aims to investigate what is the separate effect of the government, enterprises, universities, and public institutions in the establishment of new R&D institutions on enterprise incubation, and the role of cooperation between government-enterprise-academia in the enterprise incubation of new R&D institutions. In empirical tests using data from the 2020 official survey of the Ministry of Science and Technology of China, the results show that for each single cooperator, participation in the establishment of governments, academia has a positive impact on start-ups, while the participation of enterprises has no significant impact. In terms of cooperation, the co-established new R&D institutions are better in business incubation than the single establishment of new R&D institutions. The cooperation between government and academia in the establishment of new R&D institutions has a positive effect on business incubation, and other types of cooperation between government-industry, industry-academia, and government-industry-academia have no significant impact on business incubation. The research conclusion can provide a policy reference for optimizing the holding mode of new R&D institutions.     

Systemic aspects of R&D policy subsidies for R&D collaborations and their effects on private R&D

This paper analyses how context- and time-dependent factors determine the impact of R&D subsidies on firm behaviour with respect to private R&D expenditures. Based on German R&D survey data, we combine propensity score matching with a difference-in-difference estimator in order to measure the causal influence of public direct R&D project funding on firm behaviour. Our results indicate that (i) repeated participation in R&D projects on average leads to a higher increase in R&D expenditures than once-off funding; (ii) the aggregate effect of R&D funding on R&D expenditures of business firms is somewhat higher for business–business collaboration projects than for science–business collaboration projects; (iii) R&D expenditures of business firms that cooperate with science show a higher share of external R&D spending. Results of one particular cluster programme indicate that at least the short-term development of R&D does not so much depend on which programme direct R&D project funding is applied to.     

Modes of inbound knowledge flows: are cooperation and outsourcing really complementary?

This study examines the relationship between breadths of two different modes of external knowledge: R&D outsourcing and cooperation. Building upon transaction costs literature and literature on research partner breadth and R&D outsourcing, we hypothesise an U-inverted relationship between outsourcing breadth and innovation performance and a complementary relationship between R&D outsourcing and R&D cooperation. The model is tested on a large sample based on CIS survey for Spain. The empirical analysis confirms the U-inverted relationship between outsourcing breadth and innovation and also reveals an interesting result: the complementary effect of R&D cooperation varies with the level of R&D outsourcing breadth and it is not confirmed for low and medium levels of R&D outsourcing breadth. The results have important implications for theory on the selection of different modes of inbound open innovation and for managers and their cooperation and outsourcing strategies.