Elsevier

Research Policy

Volume 33, Issue 2, March 2004, Pages 209-223
Research Policy

R&D cooperation and innovation activities of firms—evidence for the German manufacturing industry

https://doi.org/10.1016/j.respol.2003.07.003Get rights and content

Abstract

The aim of the paper is to investigate in a simultaneous equation framework the role of R&D cooperation in the innovation process—in context with other factors—from two specific aspects. First, analysis focuses on the impact of R&D cooperation on firms’ innovation input and output. Second, analysis is undertaken as to how the number of cooperation partners affects the innovation behaviour of firms. Starting with the discussion of theoretically expected effects of successful R&D cooperation on the innovation activities of firms, the importance of inter-organizational arrangements in R&D is empirically investigated in respect of firms in the German manufacturing industry. The estimation results can be summarized as follows: joint R&D is used to complement internal resources in the innovation process, enhancing the innovation input and output measured by the intensity of in-house R&D or the realization of product innovations. On the input side, the intensity of in-house R&D also stimulates the probability and the number of joint R&D activities with other firms and institutions significantly.

Introduction

The importance of R&D cooperation has risen steadily as a consequence of the growing complexity, risks and costs of innovation (Coombs et al., 1996, Hagedoorn, 2002, Nooteboom, 1999). Firms engaged in the innovation process are aware of the necessity of establishing R&D cooperation to obtain expertise which cannot be generated in-house. Collaboration with other firms and institutions in R&D is a crucial way to make external resources usable. It offers possibilities of efficient knowledge transfer, resource exchange and organizational learning. Agreements in well-defined research fields, leaving aside the possibility of competition in the market (pre-competitive stage), allow the stable and comprehensive adaptation of needed resources. Complementary assets and resources can be combined and pooled, thus generating synergies and cross-fertilization effects.

In the past, the role of R&D cooperation in the innovation process has been empirically studied from different aspects. For example, Arora and Gambardella (1994) demonstrate the great importance of R&D collaboration for large US chemical and pharmaceutical companies in the biotechnology sector. Colombo (1995) provides empirical evidence of the complementary relationship between inter-firm cooperative arrangements and R&D intensity for a representative sample of international firms in the information technology industries. Veugelers (1997) identifies significant positive effects of R&D cooperation in the Flemish manufacturing industry on the level of R&D investments, but only if firms have established absorptive capacities as a full-time staffed R&D department. In this way, R&D active Flemish firms are found to be more frequently engaged in technological cooperation the more they spend on in-house R&D. Tether (2002) has studied the patterns of cooperation between innovating firms and external partners in the UK. He found that the extent of joint R&D arrangements depends on the type of partner and the technological level of innovations.

For Germany, recent studies have focused on the role of inter-organizational arrangements in specific industries and the importance of different types of R&D cooperation. For example, Peters and Becker (1999) have investigated the role of R&D cooperation with universities in the German automobile industry. Formal R&D arrangements with universities are preferred because automobile suppliers can enhance their in-house capacities and use their automobile-specific potentials more efficiently. Becker and Peters (2000) have found empirical evidence that cooperation with universities enhances the probability of R&D and increases the R&D investment of firms in the German manufacturing industry. Fritsch and Lukas, 1999, Fritsch and Lukas, 2001 identify for manufacturing enterprises in three German regions differences concerning the prospensity to collaborate with others in R&D and the kind of cooperation partners. Kaiser (2002) provides empirical evidence for the German service sector that cooperating firms invest more in research than non-cooperating firms.

A summary of the state of the art reveals two noteworthy points:

  • Up to now, empirical studies have focused on the effects of R&D cooperation on the intensity of firms’ innovation input activities (e.g. R&D intensity, R&D employment intensity). The impacts of joint R&D on the realization of new products (the innovation output side) are hardly analyzed.

  • In the past, the importance of different partners (types) of R&D cooperation has been widely investigated. Less attention has been dedicated to the question of how the number of R&D partners affects the innovation behaviour of firms.

This paper picks up these points and tries to enlarge the findings on the role of R&D cooperation in the innovation process. Analysis concentrates on the effects of R&D cooperation—in context with other exogenous factors—on firms’ innovation input and output. Furthermore, it examines whether the number of cooperation partners has stimulating effects on the innovation behaviour of firms.

The paper is organized as follows: in Section 2, key theoretical arguments about the relationship between the innovation behaviour of firms and joint R&D are described and main hypotheses for empirical analysis formulated. Section 3 describes the data set, variables used and estimation methods. Section 4 presents—in a simultaneous equation framework—the estimation results for firms in the German manufacturing industry. Section 5 contains a summary of the main findings.

Section snippets

Key theoretical arguments about the relationship between innovation behaviour of firms and joint R&D

In the following, the relationships between the innovation activities of firms and inter-organizational arrangements in R&D are analyzed from a theoretical perspective. A formal analysis is dispensed with since the focus is on the elaboration of the theoretically expected effects of R&D cooperation on the innovation behaviour of firms. The description focuses on the formulation of core arguments and their interdependencies.

The innovation behaviour of firms depends on the interaction of

Data set, variables and estimation methods

We start with the description of the data set and variables used in the empirical analysis. Then information about the estimation methods and the econometric specifications to explain the innovation effects of R&D cooperation—along with other exogenous variables—are given.

Results of the empirical analysis

In the following, the empirical findings for the innovation effects of R&D cooperation in the German manufacturing industry are presented. Before we point out the econometric results, descriptive information about the empirical evidence of R&D cooperation is given.

Summary

The aim of the paper was to analyze the role of R&D cooperation in the innovation process from two specific aspects. First, analysis centred on the impact of joint R&D—along with other factors—on firms’ innovation input and output. Second, analysis was undertaken as to how the number of cooperation partners affects the innovation behaviour of firms.

The estimation results for the innovation effects of joint R&D in the German manufacturing industry can be summarized as follows: R&D cooperation is

References (80)

  • U. Kaiser

    An empirical test of models explaining research expenditures and research cooperation: evidence for the German service sector

    International Journal of Industrial Organization

    (2002)
  • D. Kash et al.

    Patterns of innovating complex industries: a framework for adaptive network strategies

    Research Policy

    (2000)
  • A. Klevorick et al.

    On the sources and significance of inter-industry differences in technological opportunity

    Research Policy

    (1995)
  • Y. Lee

    Technology transfer and the research university: a search for the boundaries of university–industry collaboration

    Research Policy

    (1996)
  • D.P. Leyden et al.

    Federal laboratories as research partners

    International Journal of Industrial Organization

    (1999)
  • F. Malerba et al.

    Persistence of innovative activities, sectoral patterns of innovation and international technological specialization

    International Journal of Industrial Organization

    (1997)
  • B. Nooteboom

    Innovation and inter-firm linkages: new implications for policy

    Research Policy

    (1999)
  • K. Pavitt

    Sectoral patterns of technological change—towards a taxonomy and a theory

    Research Policy

    (1984)
  • P.L. Robertson et al.

    Innovation, networks, and vertical integration

    Research Policy

    (1995)
  • D. Schartinger et al.

    Knowledge interactions between universities and industry in Austria: sectoral patterns and determinants

    Research Policy

    (2002)
  • G. Steurs

    Inter-industry R&D spillovers: what difference do they make?

    International Journal of Industrial Organization

    (1995)
  • B. Tether

    Who co-operates for innovation, and why. An empirical analysis

    Research Policy

    (2002)
  • R. Veugelers

    Internal R&D expenditures and external technology sourcing

    Research Policy

    (1997)
  • K. Wakelin

    Innovation and export behaviour at the firm level

    Research Policy

    (1998)
  • Acs, Z.J. (Ed.), 1999. Are Small Firms Important? Their Role and Impact....
  • Acs, Z.J., Audretsch, D.B., 1991. Innovation and Technological Change. An International Comparison. An...
  • T. Amemiya

    The estimation of a simultaneous equation generalized Probit model

    Econometrica

    (1978)
  • T. Amemiya

    The estimation of a simultaneous-equation Tobit model

    International Economic Review

    (1979)
  • S. Arvanitis

    The impact of firm size on innovative activity—an empirical analysis based on Swiss firm data

    Small Business Economics

    (1997)
  • S. Arvanitis et al.

    Demand and supply factors in explaining the innovative activity of Swiss manufacturing firms

    Economics of Innovation and New Technology

    (1994)
  • D.B. Audretsch

    Technological regimes, industrial demography and the evolution of industrial structures

    Industrial and Corporate Change

    (1997)
  • W. Becker et al.

    R&D-competition between vertical corporate networks: structure, efficiency and R&D-spillovers

    Economics of Innovation and New Technology

    (1998)
  • Becker, W., Peters, J., 2000. University knowledge and innovation activities. In: Saviotti, P., Nooteboom, B. (Eds.),...
  • Becker, W., Peters, J., 2002. Innovation Effects of Science-Related Technological Opportunities. Working Paper Series...
  • Blundell, R.W., Smith, R.J., 1993. Simultaneous microeconometric models with censored or qualitative dependent...
  • Bundesministerium für Bildung und Forschung (Federal Ministry of Education and Research), 2001. Zur technologischen...
  • R. Cam-agni

    Inter-firm industrial network: the cost and benefits of cooperative behaviour

    Journal of Industry Studies

    (1993)
  • Cantwell, J. (Ed.), 1994. Transnational Corporations and Innovative Activities....
  • Cohen, W., 1995. Empirical studies of innovative activity. In: Stoneman, P. (Ed.), Handbook of the Economics of...
  • W.M. Cohen et al.

    Firm size and the nature of innovation within industries: the case of process and product R&D

    Review of Economics and Statistics

    (1996)
  • Cited by (546)

    • Cooperation in knowledge sharing and R&D investment

      2023, Journal of Economic Behavior and Organization
    View all citing articles on Scopus
    1

    Tel.: +49-821-598-4062.

    View full text