The Journal of Technology Transfer

, Volume 45, Issue 1, pp 339–369 | Cite as

External R&D, product and process innovation in European manufacturing companies

  • Giuseppe MeddaEmail author


We assess the relationship between firms’ Research and Development expenditures over sales and innovation output, measured by three dummies indicating whether firms have introduced any product innovation, process innovation or both types of innovations together. In particular, we estimate the impact that external sources of R&D may have on different kind of innovations, differentiating between R&D supplied by universities and other research centers, on one side, and other companies, on the other. We base our empirical analysis on a large and representative sample of European manufacturing companies from France, Germany, Italy, Spain, and the UK. Treating R&D intensity as an endogenous variable, we find that (1) R&D intensity has a positive and significant effect on the probability to introduce product innovations, process innovations, or both innovations together; (2) the share of R&D acquired from external sources has a positive impact on process innovation, and on the probability to introduce product and process innovation together, but not on product innovation alone; (3) the share of external R&D supplied by universities has a positive and significant effect on product innovation, but no correlation has been found with process innovation, while R&D acquired from other companies have a positive impact on process innovation but not on product innovation.


External R&D Product innovation Process innovation IV model 

JEL Classification

O31 O32 L60 C36 


  1. Acs, Z. J., Audretsch, D. B., & Feldman, M. P. (1994). R&D Spillovers and Recipient Firm Size. The Review of Economics and Statistics,76(2), 336–340.CrossRefGoogle Scholar
  2. Altomonte, C., & Aquilante, T. (2012). The EU-EFIGE/Bruegel-Unicredit dataset, Bruegel Working paper, #753.Google Scholar
  3. Altomonte, C., Aquilante, T., Békés, G., & Ottaviano, G. (2013). Internationalization and innovation of firms: Evidence and policy. Economic Policy,28(76), 663–700.CrossRefGoogle Scholar
  4. Altomonte, C., Gamba, S., Mancusi, M. L., & Vezzulli, A. (2016). R&D investments, financing constraints, exporting and productivity. Economics of Innovation and New Technology,25(3), 283–303.CrossRefGoogle Scholar
  5. Aristei, D., Vecchi, M., & Venturini, F. (2016). University and inter-firm R&D collaborations: Propensity and intensity of cooperation in Europe. The Journal of Technology Transfer,41(4), 841–871.CrossRefGoogle Scholar
  6. Aschhoff, B., & Schmidt, T. (2008). Empirical Evidence on the Success of R&D Cooperation—Happy Together? Review of Industrial Organization,33(1), 41–62.CrossRefGoogle Scholar
  7. Atzeni, G. E., & Carboni, O. A. (2004). ICT productivity and human capital: The Italian North-South duality. International Review of Economics and Business,51(2), 265–284.Google Scholar
  8. Barge-Gil, A., & López, A. (2014). R&D determinants: Accounting for the differences between research and development. Research Policy,43(9), 1634–1648.CrossRefGoogle Scholar
  9. Baumann, J., & Kritikos, A. S. (2016). The link between R&D, innovation and productivity: Are micro firms different? Research Policy,45(6), 1263–1274.CrossRefGoogle Scholar
  10. Becker, B. (2015). Public R&D policies and private R&D investment: A survey of the empirical evidence. Journal of Economic Surveys,29(5), 917–942.CrossRefGoogle Scholar
  11. Belderbos, R., Carree, M., Lokshin, B., & Fernández Sastre, J. (2015). Inter-temporal patterns of R&D collaboration and innovative performance. The Journal of Technology Transfer,40(1), 123–137.CrossRefGoogle Scholar
  12. Benavente, J. M. (2006). The role of research and innovation in promoting productivity in chile. Economics of Innovation and New Technology,15(4–5), 301–315.CrossRefGoogle Scholar
  13. Bogliacino, F., Lucchese, M., Nascia, L., & Pianta, M. (2017). Modeling the virtuous circle of innovation. A test on Italian firms. Industrial and Corporate Change,26(3), 467–484.Google Scholar
  14. Bozeman, B. (2000). Technology transfer and public policy: A review of research and theory. Research Policy,29(4–5), 627–655.CrossRefGoogle Scholar
  15. Bozeman, B., Fay, D., & Slade, C. (2013). Research collaboration in universities and academic entrepreneurship: The-state-of-the-art. The Journal of Technology Transfer,38(1), 1–67.CrossRefGoogle Scholar
  16. Caniëls, M. C. J. (2000). Knowledge spillovers and economic growth: Regional growth differentials across Europe. Cheltenham: Edward Elgar.Google Scholar
  17. Cappellari, L., & Jenkins, S. P. (2003). Multivariate probit regression using simulated maximum likelihood. Stata Journal,3(3), 278–294.CrossRefGoogle Scholar
  18. Carboni, O. A. (2017). The effect of public support on investment and R&D: An empirical evaluation on European manufacturing firms. Technological Forecasting and Social Change,117, 282–295.CrossRefGoogle Scholar
  19. Carboni, O., & Medda, G. (2017). R&D, export and investment decision: Evidence from European firms. Applied Economics,50(2), 187–201.CrossRefGoogle Scholar
  20. Carboni, O., & Russu, P. (2017). Complementarity in product, process, and organizational innovation decisions: Evidence from European firms. R&D Management, article in press:. Scholar
  21. Cassiman, B., & Veugelers, R. (2002). R&D cooperation and spillovers: Some empirical evidence from Belgium. American Economic Review,92(4), 1169–1184.CrossRefGoogle Scholar
  22. Charlot, S., Crescenzi, R., & Musolesi, A. (2015). Econometric modelling of the regional knowledge production function in Europe. Journal of Economic Geography,15(6), 1227–1259.CrossRefGoogle Scholar
  23. Cohen, W. M., & Levinthal, D. A. (1989). Innovation and learning: The two faces of R&D. Economic Journal,99(397), 569–596.CrossRefGoogle Scholar
  24. Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly,35(1), 128–152.CrossRefGoogle Scholar
  25. Conte, A., & Vivarelli, M. (2014). Succeeding in innovation: Key insights on the role of R&D and technological acquisition drawn from company data. Empirical Economics,47(4), 1317–1340.CrossRefGoogle Scholar
  26. Cozza, C., & Zanfei, A. (2016). Firm heterogeneity, absorptive capacity and technical linkages with external parties in Italy. The Journal of Technology Transfer,41(4), 872–890.CrossRefGoogle Scholar
  27. Cragg, J. G. (1971). Some statistical models for limited dependent variables with application to the demand for durable goods. Econometrica,39(5), 829–844.CrossRefGoogle Scholar
  28. Crepon, B., Duguet, E., & Mairesse, J. (1998). Research, innovation and productivity: An econometric analysis at the firm level. Economics of Innovation and New Technology,7(2), 115–158.CrossRefGoogle Scholar
  29. Damanpour, F., & Gopalakrishnan, S. (2001). The Dynamics of the Adoption of Product and Process Innovations in Organizations. Journal of Management Studies,38(1), 45–65.CrossRefGoogle Scholar
  30. Dechezleprêtre, A., Einiö, E., Martin, R. Nguyen, K-T.& Van Reenen, J. (2016). Do tax Incentives for Research Increase Firm Innovation? An RD Design for R&D. NBER Working Papers 22405, National Bureau of Economic Research, Inc.Google Scholar
  31. Eom, B.-Y., & Lee, K. (2010). Determinants of industry-academy linkages and their impact on firm performance: The case of Korea as a latecomer in knowledge industrialization. Research Policy,39(5), 625–639.CrossRefGoogle Scholar
  32. Eurostat (2017). Gross domestic expenditure on R&D (GERD).
  33. García-Quevedo, J., Pellegrino, G., & Vivarelli, M. (2014). R&D drivers and age: Are young firms different? Research Policy,43(9), 1544–1556.CrossRefGoogle Scholar
  34. Griliches, Z. (1979). Issues in assessing the contribution of research and development to productivity growth. Bell Journal of Economics,10(1), 92–116.CrossRefGoogle Scholar
  35. Griliches, Z. (1990). Patent statistics as economic indicators: A survey. Journal of Economic Literature,28(4), 1661–1707.Google Scholar
  36. Guisado-González, M., Wright, L. T., & Guisado-Tato, M. (2017). Product–process matrix and complementarity approach. The Journal of Technology Transfer,42(3), 441–459.CrossRefGoogle Scholar
  37. Guzzini, E., & Iacobucci, D. (2014). Business group affiliation and R&D. Industry and Innovation,21(1), 1366–2716.CrossRefGoogle Scholar
  38. Hall, B. H., Link, A. N., & Scott, J. T. (2003). Universities as Research Partners. The Review of Economics and Statistics,85(2), 485–491.CrossRefGoogle Scholar
  39. Hall, B. H., Lotti, F., & Mairesse, J. (2009). Innovation and productivity in SMEs: Empirical evidence for Italy. Small Business Economics,33(1), 13–33.CrossRefGoogle Scholar
  40. Hall, B. H., Mairesse, J., & Mohnen, P. (2010). Measuring the returns to R&D. In B. H. Hall & N. Rosenberg (Eds.), Handbook of the economics of innovation (Vol. 2, pp. 1033–1082). Amsterdam: Elsevier.CrossRefGoogle Scholar
  41. Hall, B. H., Moncada-Paternò-Castello, P., Montresor, S., & Vezzani, A. (2016). Financing constraints, R&D investments and innovative performances: New empirical evidence at the firm level for Europe. Economics of Innovation and New Technology,25(3), 183–196.CrossRefGoogle Scholar
  42. Howells, J., & Bessant, J. (2012). Introduction: Innovation and economic geography: A review and analysis. Journal of Economic Geography,12(5), 929–942.CrossRefGoogle Scholar
  43. Huang, K.-F., & Yu, C.-M. J. (2011). The effect of competitive and non-competitive R&D collaboration on firm innovation. Journal of Technology Transfer,36(4), 383–403.CrossRefGoogle Scholar
  44. Hullova, D., Trott, P., & Simms, C. D. (2016). Uncovering the reciprocal complementarity between product and process innovation. Research Policy,45(5), 929–940.CrossRefGoogle Scholar
  45. Jaffe, A. B. (1986). Technological opportunity and spillovers of R&D: Evidence from firms’ patents, profits, and market value. American Economic Review,76(5), 984–1001.Google Scholar
  46. Kang, K. H., & Kang, J. (2010). Does partner type matter in R&D collaboration for product innovation? Technology Analysis & Strategic Management,22(8), 945–959.CrossRefGoogle Scholar
  47. Kobarg, S., Stumpf-Wollersheim, J., & Welpe, I. M. (2017). University-industry collaborations and product innovation performance: The moderating effects of absorptive capacity and innovation competencies. The Journal of Technology Transfer, article in press. Scholar
  48. Li, W. C. Y., & Hall, B. H. (2016). Depreciation of business R&D capital. NBER working papers 22473, National Bureau of Economic Research, Inc.Google Scholar
  49. Lööf, H., & Broström, A. (2008). Does knowledge diffusion between university and industry increase innovativeness? The Journal of Technology Transfer,33(1), 73–90.CrossRefGoogle Scholar
  50. Lychagin, S., Pinkse, J., Slade, M. E., & Van Reenen, J. (2016). Spillovers in space: Does geography matter? Journal of Industrial Economics,64(2), 295–335.CrossRefGoogle Scholar
  51. Maietta, O. W. (2015). Determinants of university–firm R&D collaboration and its impact on innovation: A perspective from a low-tech industry. Research Policy,44(7), 1341–1359.CrossRefGoogle Scholar
  52. Mairesse, J., & Mohnen, P. (2005). The importance of R&D for innovation: A reassessment using French survey data. In A. N. Link & F. M. Scherer (Eds.), Essays in honor of Edwin Mansfield. The economics of R&D, innovation, and technological change (pp. 129–143). New York: Springer.CrossRefGoogle Scholar
  53. Mairesse, J., & Robin, S. (2017). Assessing measurement errors in the CDM research–innovation–productivity relationships. Economics of Innovation and New Technology,26(1–2), 93–107.CrossRefGoogle Scholar
  54. Medda, G., & Piga, C. (2014). Technological spillovers and productivity in Italian manufacturing firms. Journal of Productivity Analysis,41(3), 419–434.CrossRefGoogle Scholar
  55. Nieto, M. J., & Santamaría, L. (2007). The importance of diverse collaborative networks for the novelty of product innovation. Technovation,27(6–7), 367–377.CrossRefGoogle Scholar
  56. OECD. (2005). Oslo manual: Guidelines for collecting and interpreting innovation (3rd ed.). Paris: OECD Publishing.CrossRefGoogle Scholar
  57. Peters, B. (2009). Persistence of innovation: Stylised facts and panel data evidence. The Journal of Technology Transfer,34(2), 226–243.CrossRefGoogle Scholar
  58. Roodman, D. (2011). Fitting fully observed recursive mixed-process models with cmp. Stata Journal,11(2), 159–206.CrossRefGoogle Scholar
  59. Siegel, D., & Wessner, C. (2012). Universities and the success of entrepreneurial ventures: Evidence from the small business innovation research program. The Journal of Technology Transfer,37(4), 404–415.CrossRefGoogle Scholar
  60. Srholec, M. (2015). Understanding the diversity of cooperation on innovation across countries: Multilevel evidence from Europe. Economics of Innovation and New Technology,24(1–2), 159–182.CrossRefGoogle Scholar
  61. Un, C. A., & Asakawa, K. (2015). Types of R&D collaborations and process innovation: The benefit of collaborating upstream in the knowledge chain. Journal of Product Innovation Management,32(1), 138–153.CrossRefGoogle Scholar
  62. Un, C. A., Cuervo-Cazurra, A., & Asakawa, K. (2010). R&D collaborations and product innovation. Journal of Product Innovation Management,27(5), 673–689.CrossRefGoogle Scholar
  63. Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data (2nd ed.). Cambridge: Mit Press.Google Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Economics (DiSEA)University of SassariSassariItaly

Personalised recommendations