Working Paper #2007-026
The productivity effects of internal and external R&D: Evidence from a dynamic panel data model
We examine the impact of internal and external R&D on labor productivity
in a 6-year panel of Dutch manufacturing firms. We apply a dynamic
linear panel data model that allows for decreasing or increasing returns
to scale in internal and external R&D and for economies of scope. We
find complementarity between internal and external R&D, with a positive
impact of external R&D only evident in case of sufficient internal R&D.
These findings confirm the role of internal R&D in enhancing absorptive
capacity and hence the effective utilization of external knowledge. The
scope economies due the combination of internal and external R&D are
accentuated by decreasing results to scale at high levels of internal
and external R&D. The analysis indicates that on average productivity
grows by increasing the share of external R&D in total R&D.
- Keywords
-
- R&D
- Innovation
- Complementarity
- Panel data
- JEL codes
-
- O32
- O33
- D24
- UNU-MERIT
- Working
- Papers
- ISSN
- 1871-9872
Cite this as
APA 7th ed.Lokshin, B., Belderbos, R., & Carree, M. (2007). The productivity effects of internal and external R&D: Evidence from a dynamic panel data model (UNU-MERIT Working Paper No. 2007-026). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=2992