Open strategies and innovation performance

Barge-Gil, Andrés (2011): Open strategies and innovation performance.

Abstract

Scholarly interest in the relationship between open strategies and innovation performance has been unfailing, and in recent years has even increased. The present paper focuses on inbound open strategies and reviews various approaches (transaction costs, competences, open innovation) dealing with firms´ decisions about these strategies. The different approaches result in different conclusions about the optimum level of openness. The different approaches are tested empirically taking account of the different degrees of openness (closed, semiopen, open, ultraopen) and their effects on sales of new–to-the-market products, and using a panel of Spanish firms from a CIS-type survey for 2004-2008. Our results show that closed and semiopen strategies are the most common among Spanish firms and that open strategies produce the best performance, while semiopen strategies are more effective than closed ones. These results hold across different subsamples based on firm size and industry, and are robust to different ways of defining the indicators and to different estimation methods.

• Item Type: MPRA Paper
• Language: English
• Keywords: open innovation strategies, collaboration, transaction costs, competences, CIS surveys, R&D, technology policy
• Subjects: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior; D - Microeconomics > D2 - Production and Organizations; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights

References

Abramovsky, L., Kremp, E., López, A., Schmidt, T., Simpson, H., 2009. Understanding co-operative innovative activity: Evidence from four European countries. Economics of Innovation and New Technology 18(3), 243-265.

Ambrosini, V., Bowman, C. 2009. What are the dynamic capabilities and are they a useful construct in strategic management? International Journal of Management Reviews 11(1), 29-49.

Angrist, JD., Pischke, JD. 2008. Mostly Harmless Econometrics. An Empiricist's Companion. Princeton University Press.

Aschhoff, B. and Schmidt, T. 2008. Empirical evidence on the success of R&D cooperation – happy together? Review of Industrial Organization 33: 41-62.

Barge-Gil; A. 2010a. Cooperation-based innovators and peripheral cooperators: An empirical analysis of their characteristics and behavior Technovation 30(3), 195-206.

Barge-Gil, A. 2010b. Open, semi-open and closed innovators: Towards an explanation of degree of openness. Industry and Innovation 17(6), 577-607.

Barge-Gil, A., Nieto, MJ., Santamaría, L. 2011a. Hidden innovators: the role of non R&D activities. Technology Analysis & Strategic Management 23(4), 415-432.

Barge-Gil, A., Santamaría, L., Modrego, A. 2011b. Complementarities between universities and technology institutes.: New empirical lessons and perspectives. European Planning Studies 19(2), 195-215.

Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management 17, 99-120.

Beneito, P. 2003. Choosing among alternative technological strategies: an empirical analysis of formal sources of innovation. Research Policy 32, 693-713.

Beneito, P. 2006. The innovative performance of in-house and contracted R&D in terms of patents and utility models. Research Policy 35, 502-517.

Bianchi, M., Cavaliere, A., Chiaroni, D., Frattini, F., Chiesa, V 2010. Organisational modes for Open Innovation in the bio-pharmaceutical industry: An exploratory analysis. Technovation. In press.

Bloom, N., Van Reenen, J. 2010. Why Do Management Practices Differ across Firms and Countries? Journal of Economic Perspectives 24(1), 203-224.

Bodas-Freitas, I.M., Clausen, T.H., Fontana, R., Verspagen, B. 2010. Formal and informal external linkages and firms´ innovative strategies. A cross-country comparison. Journal of Evolutionary Economics. In press.

Brouwer, E., and Kleinknecht, A. 1996. Firm size, small business presence and sales of innovative products: a micro-econometric analysis. Small Business Economics 8, 189-201.

Buchinsky, M. 1998. Recent advances in quantile regression model: A practical guideline for empirical research. Journal of Human Resources 33 (1), 88–126.

Caloghirou, Y., Kastelli, I., and Tsakanikas, A. 2004. Internal capabilities and external knowledge sources: complements or substitutes for innovative performance? Technovation 24, 29-39.

Cameron, A., and Trivedi, P. 2005. Microeconometrics. Methods and Applications. Cambridge University Press.

Cameron, A., and Trivedi, P. 2009. Microeconometrics using Stata. Stata Press.

Cassiman, B., Valentini, G., 2009. Strategic organization of R&D: the choice of basicness and openness. Strategic Organization 7(1), 43-73.

Chesbrough, H. 2003. Open innovation. Harvard University Press. Cambridge, MA.

Chesbrough, H. 2006. Open innovation: A new paradigm for understanding industrial innovation. In Chesbrough, H., Wanhaverbeke, W., West, J. : Open innovation: researching a new paradigm. Oxford University Press, New York, 1-12.

Chesbrough, H., Crowther, A., 2006. Beyond high tech: early adopters of open innovation in other industries. R&D Management 36(3), 229-236.

Chesbrough, H. 2007: Why companies should have open business models. MIT Sloan Management Review 48(2), 22-28

Chesbrough, H., Appleyard, M. 2007. Open innovation and strategy. California Management Review 50(1), 57-76.

Chesbrough, H., Schwartz, K. 2007. Innovating business models with co-development partnerships. Research Technology Management 50(1), 55-59.

Chiaroni, D., Chiesa, V., Frattini, F. 2009. The Open innovation journey: How firms dynamically implement the emerging innovation paradigm. Technovation. In press.

Dahlander, L., Gann, D.M. 2010. How open is innovation? Research Policy 39(6), 699-709.

Das, T.K., Teng, B-S. 2000). A resource-based theory of strategic alliances. Journal of Management 26(1), 31-61.

Delmas, M. A. 1999). Exposing Strategic Assets to Create New Competencies: The Case of Technological Acquisition in the Waste Management Industry in Europe and North America’, Industrial and Corporate Change 8: 635–52.

Dodgson, M., Gann, D., Salter, A. 2006. he role of technology in the shift towards open innovation: the case of Procter & Gamble. R&D Management 36, 333-346.

Dosi, G. 1988. Sources, procedures and microeconomic effects of innovation. Journal of Economic Literature 26(3), 1120-1171.

Ebersberger, B., Marsili, O., Reichstein, T., Salter, A. 2008. Fortune favours the brave. The distribution of innovative returns in Finland, the Netherlands and the UK. Structural Change and Economic Dynamics 19, 357-362.

Ebersberger, B., Marsili, O., Reichstein, T., Salter, A. 2010. Into thin air: using a quantile regression approach to explore the relationship between R&D and innovation. International Review of Applied Economics 24(1), 95-102.

Elmquist, M., Fredberg, T., Ollila, S. 2009. Exploring the field of open innovation. European Journal of Innovation Management 12(3), 326-345.

Enkel, E., Gassmann, O., Chesbrough, H. 2009. Open R&D and open innovation: exploring the phenomenon. R&D Management 39(4), 311-316.

Faems, D., Van Looy, B., and Debackere, K. 2005. Interorganizational collaboration and innovation: toward a portfolio approach. The Journal of Product Innovation Management 22: 238-250.

Fosfuri, A., Tribó, J. 2008. Exploring the antecedents of potencial absorptive capacity and its impact on innovation performance. Omega 36, 173-187.

Foss, N. 2003. The strategic management and transaction costs nexus: Past debates, central questions and future research possibilities. Strategic Organization 1, 139-169

Foss, N., Klein, P. 2010. Critiques of Transaction Cost Economics: An Overview. In Peter G. Klein and Michael E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Aldershot, U.K.: Edward Elgar). Forthcoming.

Freel, M., de Jong, J. 2009. Market novelty, competence-seeking and innovation networking. Technovation 29(12), 873-884.

Freeman, C. 1991: Networks of innovators. A synthesis of research issues. Research Policy 20(5), 499-514.

Freeman, C. 1994: The economics of technical change. Cambridge Journal of Economics 18, 463-514.

Fontana, R., Geuna, A., Matt, M. 2006: Factors affecting university-industry R&D projects: The importance of searching, screening and signalling. Research Policy 35, 309-323.

Frenz, M., and Ietto-Gillies, G. 2009. The impact on innovation performance of different sources of knowledge: evidence from the UK Community Innovation Survey. Research Policy 38: 1125-1135.

Galende, J. 2006. Analysis of technological innovation from business economics and management. Technovation 26, 300-311.

Gassmann, O. 2006. Opening up the innovation process: towards an agenda. R&D Management 36(3), 223-228.

Gassmann, O., Enkel, E., Chesbrough, H. 2010. The future of open innovation. R&D Management 40(3), 213-221.

Griffith, R., Huergo, E., Mairesse, J., Peters, B. 2006: Innovation and productivity across four European countries. Oxford Review of Economic Policy 22(4), 483-498.

Griffiths, W., Webster, E. 2010. What governs firm-level R&D: Internal or external factors? Technovation. In press.

Gulati, R., Singh, H. 1998. The Architecture of Cooperation: Managing Coordination Costs and Appropriation Concerns in Strategic Alliances. Administrative Science Quarterly 43(4), 781-814.

Hall, B., Lotti, F., Mairesse, J. 2009. Innovation and productivity in SMEs: empirical evidence for Italy. Small Business Economics 33, 13-33.

Hansen, M. 1999: The search-transfer problem: the role of weak ties in sharing knowledge across organizational subunits. Administrative Science Quarterly 44(1), 82-111.

Heijs, J., 2005. Identification of firms sorted by technology policies: The case of Spanish low interest credits. Science and Public Policy 32(3), 219-230.

Hodgson, G. 1998. Competence and contract in the theory of the firm. Journal of Economic Behavior & Organization 35, 179-201.

Huizingh, E. 2010. Open innovation: State of the art and future perspectives. Technovation. In press.

Jaffe, A. 2008. The "Science of Science Policy": reflections on the important questions and the challenges they present. Journal of Technology Transfer 33, 131-139.

Katila, R., Ahuja, G. 2002: Something old, something new: a longitudinal study of search behaviour and new product innovation. Academy of Management Journal 45(8), 1183-1194.

Knudsen, MP., Mortensen, TB. 2010. Some immediate -but negative- effects of openness on product development performance. Technovation. In press.

Karlsson, C. 1997. Product development, innovation networks, infrastructure and agglomeration economies, Annals of Regional Science 31, 235–58

Kleinknecht, A., van Montfort, K., Brouwer, E. 2002. The non-trivial choice between innovation indicators. Economics of innovation and new technology 11(2), 109-121.

Klomp, L., and Van Leeuwen, G. 2001. Linking innovation and firm performance: a new approach. International Journal of the Economics Business 8 (3): 343-364.

Koenker, R.W., Bassett, GJ. 1978. Regression quantiles. Econometrica 46 (1), 33–50.

Koschatzky, K. 1998. Firm innovation and region: the role of space in innovation processes, International Journal of Innovation Management 2, 383–408.

Lambrecht, J., Pirnay, F., 2005. An evaluation of public suort measures for private external consultancies to SMEs in the Walloon region of Belgium. Entrepreneurship & Regional Development 17, 89-108.

Laursen, K., Salter, A., 2006. Open for innovation: the role of openness in explaining innovation performance among U.K. manufacturing firms. Strategic Management Journal 27, 131-150.

Lazzarotti, V., Manzini, R. 2009. Different modes of open innovation: A theoretical framework and an empirical study. International Journal of Innovation Management 13(4), 615-636.

Lichtenthaler, U. 2008. Open innovation in practice: An analysis of strategic approaches to technology transaction. IEEE Transactions on Engineering Management 55(1), 148-157.

Lichtenthaler, U. 2011. Open Innovation: Past Research, Current Debates, and Future Directions. Academy of Management Review. Forthcoming.

Love, JH, Roper, S. 1999. The determinants of innovation: R&D, technology transfer and networking effects. Review of Industrial Organization 15, 43-64.

Love, JH., Roper, S. 2001. Outsourcing in the innovation process: Locational and strategic determinants. Papers in Regional Science 80, 317-336.

Love, JH., Roper, S. 2005. Economists` perceptions versus managers` decisions: an experiment in transaction-cost analysis. Cambridge Journal of Economics 29, 19-36.

Lundvall, BA. 1993: Explaining interfirm cooperation and innovation. Limits of the transaction cost approach. In Grabher, G (Ed); The Embedded Firm: On the Socioeconomics of Industrial Networks, Routledge, London, pp. 52-64

Madhok, A., Tallman, S.B. 1998. Resources, transactions and rents: Managing value through interfirm collaborative relationships. Organization Science 9(3), 326-339.

McKelvey, B., Andriani, P. 2005: Why Gaussian statistics are mostly wrong for strategic organization. Strategic Organization 3 (2), 219–28.

Mairesse, J., Mohnen, P. 2010: Using innovation surveys for econometric analysis. In Hall, B.H., Rosenberg, N. (Eds.): Handbook of the Economics of Innovation.

Marsili, O., Salter, A. 2005. ´Inequality´ of innovation: Skewed distributions and the returns to innovation in Dutch Manufacturing. Economics of Innovation and New Technology 14(1-2), 83-102.

Massa, S., Testa, S. 2008. Innovation and SMEs: Misaligned perspectives and goals among entrepreneurs, academics and policy makers. Technovation 28, 393-407.

Mazzanti, M., Montresor, S., Pini, P. 2009. What drives (or hampers) outsourcing? Evidence for a Local Production System in Emilia Romagna. Industry and Innovation 16(3), 331-365.

Menon, T., Pfeffer, J. 2003. Valuing Internal vs External Knowledge: Explaining the Preference for Outsiders. Management Science 49(4).

Miotti, L., Sachwald, F., 2003 Co-operative R&D: Why and with whom? An integrated framework of analysis. Research Policy 32, 1481-1499.

Mohnen, P., Mairesse, J., Dagenais, M. 2006. Innovativity: a comparison across seven european countries. Economics of Innovation and New Technology 15(4/5), 391-413.

Mol, M. 2005. Does being R&D intensive still discourages outsourcing? Evidence from Dutch manufacturing. Research Policy 34, 571-582.

Mowery, D.C. 1983: The relationship between intrafirm and contractual forms of industrial research in American manufacturing, 1900-1940. Explorations in Economic History 20, 351-374.

Narula, R. 2001. Choosing between internal and non-internal R&D activities: some technological and economic factors. Technology Analysis & Strategic Management 13(3), 365-387.

Negassi, S., 2004. R&D cooperation and innovation a microeconometric study on French firms. Research Policy 33, 365-384.

Nieto, MJ., Santamaría, L. 2010. Technological collaboration: bridging the gap innovation gap between small and large firms. Journal of Small Business Management 48(1), 44-69

Nooteboom, B. 2004. Governance and competence: how can they be combined? Cambridge Journal of Economics 28, 505-525.

OECD 2005. OECD Science, technology and industry scoreboard 2005. OECD Publishing.

Oerlemans, L., Meeus, M., Boekema, F, 1998. Do networks matter for innovation? The usefulness of the economic network approach in analysing innovation. Tijdschrift voor Economische en Sociale Geografie 89(3), 298-309.

Ortega-Argilés, R., Vivarelli, M., Voigt, P. 2009. R&D in SMEs: a paradox? Small Business Economics 33, 3-11.

Ozman, M. 2009. Inter-firm networks and innovation: a survey of the literature. Economics of Innovation and New Technology 18(1), 39-67.

Peters, B. 2009. Persistence of innovation: stylised facts and panel data evidence. Journal of Technology Transfer 34, 226-243.

Pires CP., Sarkar S., Carvalho L 2008: Innovation in services - how different from manufacturing? Service Industries Journal 28(10), 1339-1356.

Raymond, W., Mohnen, P., Palm, F., and van der Loeff , S. S. 2006. A classification of Dutch manufacturing based on a model of innovation. De Economist 154: 85-105.

Robertson, T., Gatignon, H. 1998. Technology development mode: A transaction cost conceptualization. Strategic Management Journal 19(6), 515-531.

Sakakibara, M. 1997. Heterogeneity of firm capabilities and cooperative research and development: an empirical examination of motives. Strategic Management Journal 18, 143-164.

Santamaría, L., Nieto, MJ., Barge-Gil, A. 2009. Beyond formal R&D: Taking advantage of other sources of innovation in low-and medium-technology industries. Research Policy 38, 507-517.

Scherer, FM., Harhoff, D. 2000: Technology policy for a world of skew-distributed outcomes. Research Policy 29, 559-566.

Sirilli, G., Evangelista, G. 1998. Technological innovation in services and manufacturing: Results from Italian surveys. Research Policy 27(9), 881 -899.

Spithoven, A., Frantzen, D., Clarysse, B. 2010. Heterogeneous firm-level effects of knowledge exchanges on product innovation: differences between dynamic and lagging product innovators. Journal of Product Innovation Management 27, 362-381.

Teece, DJ. 1988. Technological change and the nature of the firm. In Dosi, G., Freeman, C., Nelson, R., Soete, L. (Eds): Technical change and economic theory. Pinter Publishers. London and New York. 256-281.

Tomlinson, P.R., 2010. Co-operative ties and innovation: some new evidence for UK manufacturing. Research Policy 39(6), 762-775.

Trott, P., Hartmann, D. 2009. Why 'Open Innovation' is old wine in new bottles. International Journal of Innovation Management 13(4), 715-736

van de Vrande, V., de Jong, J., Vanhaverbeke, W., de Rochemont, M. 2009. Open innovation in SMEs: Trends, motives and management challenges. Technovation 29, 423-437.

Vásquez-Urriago, A., Barge-Gil, A., Modrego, A., Paraskevopoulou, E. 2011. The Impact of Science and Technology Parks on Firms' Radical Product Innovation. Empirical Evidence from Spain. MPRA Working Paper 30555.

Vega-Jurado, J., Gutiérrez-Gracia, A., Fernández-de-Lucio, I., Manjarrés-Henríquez, L., 2008. The effect of external and internal factors on firms` product innovation. Research Policy 37(4), 616-632

Vega-Jurado, J., Gutierrez-Gracia, A., Fernandez-de-Lucio, I. 2009. Does external knowledge sourcing matter for innovation? Evidence from the Spanish manufacturing industry. Industrial and Corporate Change 18(4), 637-670.

Vence, X., 1998. La política tecnológica comunitaria y la cohesión regional. Los retos de los sistemas de innovación periféricos. Civitas. Madrid.

Veugelers, R., 1998. Collaboration in R&D: an assessment of theoretical and empirical findings. The Economist 149, 419-443.

Veugelers, R., Cassiman, B. 1999. Make and buy in innovation strategies: evidence from Belgian manufacturing firms. Research Policy 28, 63-80.

West, J., Vanhaverbeke, W., Chesbrough, H. 2006. Open innovation: a research agenda. In Chesbrough, H., Wanhaverbeke, W., West, J.: Open innovation: researching a new paradigm. Oxford University Press, New York, 285-307.

Williamson, O.E. 1979. Transaction-cost economics: The governance of contractual relations. Journal of Law and Economics 22(2), 233-261.

Williamson, O.E. 1981. The Economics of Organization: The Transaction Cost Approach. The American Journal of Sociology 87(3), 548-577.

Williamson, O.E. 1985. The Economics Institutions of Capitalism. New York. Free Press.

Williamson, O.E. 1991. Comparative economic organization: The analysis of discrete structural alternative. Administrative Science Quarterly 36(2), 269-296.

Williamson, O.E. 1999. Strategy research: Governance and competence perspectives. Strategic Management Journal 20, 1087-1108.

Williamson, O.E. 2010. Transaction Costs Economics: The Natural Progression. American Economic Review 100, 673-690.

Witzeman, S., Slowinski, G., Dirkx, R., Gollob, L., Tao, J., Ward, S., Miraglia, S. 2006). Harnessing external technology innovation. Research Technology Management 49(3), 19-27.

Wooldridge, J. (2002). Econometric Analysis of Cross Section and Panel Data. MIT Press.