Abstract
We study whether regional, national, and international inter-firm collaboration complement or substitute for enterprise R&D investments as drivers of product innovation. Analysing a large-scale dataset of 6,584 Norwegian enterprises, we find that for enterprises without R&D investments, regional collaboration, in particular, has a positive innovation effect. Unsurprisingly, R&D investments also have a positive innovation effect, but more interestingly; for enterprises with R&D investments, international collaboration has an additive effect, whereas regional and national collaboration have no effect. The findings imply that regional collaboration, in particular, substitutes for enterprise R&D investments as a driver of product innovation, whereas international collaboration has an additive and complementary effect. We moreover find that in particular enterprises with R&D investments, but without international collaboration, are more innovative the smaller they are. Conversely, enterprises with R&D investments have a stronger innovation effect from international collaboration the larger they are.
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