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Eurasian Business Review

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16-01-2018 | Original Paper

The journey towards open innovation: why do firms choose different routes?

Authors: Levan Bzhalava, Uwe Cantner

Published in: Eurasian Business Review | Issue 3/2018

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Abstract

Prior research on open innovation provides no systematic insight whether firms with internal innovation constraints increase the scale of R&D outsourcing or the number of innovation cooperation partnerships. Motivated by this research gap in the literature, we study the effect of economic- and knowledge-related innovation impediments on a degree of formal openness in innovation. Analyzing a 3 years panel dataset of German manufacturing firms obtained from Mannheim Innovation Panel (MIP) database, we find that knowledge-related obstacles induce firms to increase the scale of R&D outsourcing as well as to engage in innovation cooperation partnerships. Contrariwise, a non-significant relationship is detected between economic related innovation impediments and R&D openness. Hence, the study suggests that a high degree of openness in innovation is driven by knowledge shortages rather than cost-risk minimization objectives.

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The terms R&D outsourcing and external R&D are used interchangeably in the study.

The variable is expressed in percentages.

Total innovation expenditures are scaled by sales to avoid the firm size effect in R&D spending.

We compare the GEE models with negative binomial and Poisson family distributions with each other. The former model presents a lower value of the Akaike Information Criterion. Therefore, the GEE model with negative binomial family distribution is considered to be a better fitted model for the data than the one with Poisson family distribution.

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Title: The journey towards open innovation: why do firms choose different routes?
Authors: Levan Bzhalava
Uwe Cantner
Publication date: 16-01-2018
Publisher: Springer International Publishing
Published in: Eurasian Business Review / Issue 3/2018
Print ISSN: 1309-4297
Electronic ISSN: 2147-4281
DOI: https://doi.org/10.1007/s40821-017-0101-9

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