Absorptive capacity, coopetition and product innovation: A comparative analysis between Italian and Portuguese service firms

Abstract

This paper focuses on the effects of absorptive capacity and coopetition on the generation of product innovation, by making use of service firms, both Knowledge intensive (KIS) and Less Knowledge intensive service (LKIS) firms, from Italy and Portugal. For this purpose, we use two datasets of 8647 Italian service firms and 2500 Portuguese service firms that participated in the European Community Innovation Survey (CIS), 2010. A logit analysis is conducted for ‘KIS’ and ‘LKIS’ firms and, the results reveal that for both KIS and LKIS service firms in Italy, absorptive capacity enablers, such as external R&D, internal R&D and employees expertise have a positive and significant effect on the generation of product innovation. In addition, the establishment of coopetion relationships with Italian concurrent firms denotes a positive and significant effect on the generation of product innovation. Furthermore, for the LKIS service Italian firms, the coopeting relations with rival firms located in China and India also denotes a positive and significant impact on product innovation. For the Portuguese KIS firms, we find out that the internal R&D activities and acquisition of external R&D have a positive and significant effect on the generation of product innovation. In addition, the set of coopetition relationships with concurrent European firms also presents a positive and significant effect on the generation of product innovation. For the LKIS firms, the internal R&D and the external R&D also impact positively and in a significant way on the generation of innovation. Moreover, for this sub-sample, the coopeting schemes with rival companies inside the country also denote a significant and positive effect on the firms' product innovation.