Abstract
Product innovation is widely thought to benefit from collaboration with both scientific and supply-chain partners. The combination of exploration and exploitation capacity, and of scientific and experience-based knowledge, are expected to yield multiplicative effects. However, the assumption that scientific and supply-chain collaboration are complementary and reinforce firm-level innovation has not been examined empirically. This paper tests this assumption on an unbalanced panel sample of 8337 firm observations in Norway, covering the period 2006–2010. The results of the econometric analysis go against the orthodoxy. They show that Norwegian firms do not benefit from doing “more of all” on their road to innovation. While individually both scientific and supply-chain collaboration improve the chances of firm-level innovation, there is a significant negative interaction between them. This implies that scientific and supply-chain collaboration, in contrast to what has been often highlighted, are substitutes rather than complements. The results are robust to the introduction of different controls and hold for all tested innovation outcomes: product innovation, new-to-market product innovation, and share of turnover from new products.
Highlights
Networking and collaborating with external agents are widely seen as essential factors for innovation (e.g. Powell et al, 1996; Chesbrough, 2003)
Prior literature has argued that firms combining science-based and experience-based knowledge in innovation processes are more likely to innovate as a consequence of the complementarities between the two types of knowledge
This is a core tenet of the literature on innovation modes since the publication of Jensen et al.’s (2007) seminal article
Summary
Networking and collaborating with external agents are widely seen as essential factors for innovation (e.g. Powell et al, 1996; Chesbrough, 2003). Supply-chain and scientific partners are considered to bring different types of knowledge to the firm. Whether scientific and supply-chain collaboration are complementary – in the sense that using both types of partners simultaneously has a multiplicative effect on firm-level innovation – has seldom been tested. The panel is constructed using data from three waves of the Community Innovation Survey, supplemented with linked employer-employee data on the composition of each firm’s workforce On this dataset, we first examine the effects of collaborating with scientific and supply-chain partners on the likelihood of firms introducing product innovations and their share of turnover from these innovations. By formally examining complementarities between scientific and supply-chain collaboration with the inclusion of an interaction term, it tests a core proposition in the literature stressing that combining different types of collaboration is beneficial to innovation. Conclusions and suggestions for future research are presented in the final section
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