Are global R&D partnerships enough to increase a company's innovation performance? The role of search and integrative capacities

Abstract

The number of global R&D partnerships has grown in recent times thanks to the wealth of cross-cultural knowledge and skills they provide to businesses, allowing firms to significantly differentiate their innovation processes and upgrade their innovation performance. But, in order to integrate and capitalize on external knowledge drawn through these international partnerships, companies also need to more effectively develop key internal capabilities. While the literature shows that absorptive capacity is critical in this process, only few studies successfully break up this concept into sub-capacities and analyze their specific impacts on firm's innovation performance, in particular in the specific and underdeveloped context of global R&D partnerships (GPs). This study addresses this research gap by empirically analyzing the interrelation between global R&D partnerships, search and integrative capacities, and innovation performance. We tested our hypotheses on a sample of 112 medium-sized Italian firms with established GPs, leveraging a Partial Least Square (PLS) Structural Equation Model (SEM). Our results suggest that knowledge drawn from GPs plays a vital role in the innovation processes of the analyzed firms, but only when combined with the development of both of the internal sub-capacities we investigated (namely search and integrative capacities) thus, demonstrating an indirect effect. Also, search capacity was found to have a stronger effect compared to integrative capacity, while also affecting the integrative capacity of the firm in question. The implications from a managerial perspective are also provided in order to stimulate debate on international R&D collaborations.