Academic journal article Innovation: Organization & Management

Cooperative Innovation: In Quest of Effective Partners. Evidence from Italian Firms

Academic journal article Innovation: Organization & Management

Cooperative Innovation: In Quest of Effective Partners. Evidence from Italian Firms

Article excerpt

(ProQuest: ... denotes formulae omitted.)

1. Introduction

This paper aims at investigating the determinants for cooperative behavior in innovation activities of Italian firms. Italian firms are usually characterized by a low level of innovation activity and this is now considered as one of the main reasons to explain the slowdown of the Italian productivity over the last 15 years (see Brandolini & Bugamelli, 2009, for a full understanding of the Italian economic situation, and Bugamelli, Cannari, Lotti, & Magri, 2012, for an analysis of the possible causes of the innovation gap of Italian firms). The reasons usually given to explain this situation refer to productivity specialization, to firms' governance, and especially to the undercapitalization of Italian firms and overdependence on bank credit (Micucci & Rossi, 2012). Most of these problems have a structural character and cannot be solved in the short run. Hall, Matos, and Silverstre (2012) underline the key role of R&D on the Italian firms' productivity, although only a third of Italian firms appear to invest in R&D. Innovation is today seen as the crucial element for greater competitiveness and it is now perceived as one of the key challenges facing businesses. Thus, the possibility of engaging in collaboration with research oriented partners is one way of dealing with the above mentioned problems.

The importance of partners as sources of new knowledge is growing ever stronger as entrepreneurs increasingly recognize that technological innovation depends less and less on an individual firm's isolated efforts (Drejer & Jorgensen, 2005; Fischer & Varga, 2002). In the light of this, a substantial empirical and theoretical effort has been devoted to understanding R&D collaboration (Mariti & Smiley, 1983 and, for a survey of the literature, Ozman, 2009). The positive impact of external R&D cooperation on corporate innovation performance has been shown in a large number of cross-sectional studies and this runs parallel to the well-known fact that innovations are increasingly brought into the market by networks of firms (see, e.g., Faems, Van Looy, & Debackere, 2005; Hoang & Rothaermel, 2005; Lööf & Broström, 2008; Miotti & Schwald, 2003). These empirical regularities may be explained by the fact that R&D partnerships can represent an effective means of internalizing spillover, reducing transaction costs and/or to exploring and assimilating new knowledge fields in the core competencies of other firms.

The contribution of this paper is twofold. First, it investigates the determinants of partner choice in collaboration and secondly it analyzes the factors affecting a firm's ability to introduce new or significantly improved goods and/or services and/or processes. In recent years, the determinants of innovation have become an important research topic and both theoretical and empirical literature have increasingly focused on R&D cooperation by innovative firms. This literature assumes that cooperative R&D agreements involve relationships between organizations aiming to carry out R&D projects to enhance their innovation. We show that forms of collaboration differ according to cooperation type and strongly depend on specific company attributes.

The study is carried out using firm level data from the Community Innovation Survey (CIS 2008) for Italy. Cooperation is examined across three dimensions: vertically, i.e. firms cooperating with customers and suppliers; horizontally, i.e. firms cooperating with their competitors, consultants, research institutes or private labs; and finally institutionally, i.e. through cooperation agreements with universities and public research centers. This dataset includes information about both innovative and non-innovative firms but since the partners for cooperation activity are only observed for innovating firms, we faced a possible sample selection problem. …

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