Paradigm Shift? Open Innovation and the Innovative Performance of EU Firms

34 Pages Posted: 30 Jan 2014

See all articles by Giuliana Battisti

Giuliana Battisti

Warwick Business School

Jorge Gallego

Universidad Autónoma de Madrid

Luis Rubalcaba

University of Alcala

Paul Windrum

University of Nottingham

Date Written: January 2012

Abstract

It has been suggested that a paradigm shift is taking place, from the old model of product innovation based on in-house R&D, to a new model based on the intensive use of external sources (search depth). We test this using Eurostat CIS4 data for 40 sectors in 18 European countries. The findings of estimated GLM models suggest a more nuanced understanding of the role of external search is required. Internal R&D, rather than external search depth, are found to be the key factors affecting the performance of innovation leaders. Further, we find no evidence of a substitution effect between R&D and external sources for innovation leaders. External search is identified as an important factor affecting the performance of innovation followers. There is also evidence of a substitution effect amongst these particular firms, indicating they replace formal R&D with openness, in order to acquire the information needed to catch-up with innovation leaders. These findings are consistent with the old innovation model, cautioning against the suggestion that a paradigm shift has occurred.

Keywords: open innovation, search depth, innovation performance, R&D, Europe

JEL Classification: O32, C24

Suggested Citation

Battisti, Giuliana and Gallego, Jorge and Rubalcaba, Luis and Windrum, Paul, Paradigm Shift? Open Innovation and the Innovative Performance of EU Firms (January 2012). Available at SSRN: https://ssrn.com/abstract=2387545 or http://dx.doi.org/10.2139/ssrn.2387545

Giuliana Battisti (Contact Author)

Warwick Business School ( email )

Scarman road
Coventry CV4 7AL
United Kingdom

Jorge Gallego

Universidad Autónoma de Madrid ( email )

Calle Francisco Tomás y Valiente, 5
Madrid, 28049
Spain

Luis Rubalcaba

University of Alcala ( email )

Plaza de la Victoria s/n
Alcala de Henares, Madrid 28802
Spain

Paul Windrum

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

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