Abstract

http://ssrn.com/abstract=1908940
 


 



Behind the Scenes: Sources of Complementarity in R&D


Marco Ceccagnoli


Scheller College of Business, Georgia Tech

Matthew John Higgins


Georgia Institute of Technology - Scheller College of Business; National Bureau of Economic Research (NBER)

Vincenzo Palermo


University of Toronto - Munk School of Global Affairs

January 31, 2013


Abstract:     
Even though management consultants increasingly recommend that in-house research be outsourced, little is known about the conditions favoring substitution or complementarity between internal R&D and external technology acquisition. In this paper, we attempt to provide a deeper understanding of the firm-level drivers of complementarity between these two types of investments through the structural estimation of a flexible innovation production function, such as the translog. Our empirical analysis is based on a unique panel dataset on the R&D and in-licensing expenditures of 94 global pharmaceutical firms active in drug development between 1997 and 2005. Our results suggest that internal R&D and in-licensing in the pharmaceutical industry were neither complements nor substitutes during the study period. However, we find that the degree of complementarity is enhanced for firms with stronger absorptive capacity, economies of scope, and past licensing experience.

Number of Pages in PDF File: 41

Keywords: Licensing, R&D, Productivity, Markets for Technology, Product Innovation

JEL Classification: L24, L65, O31, 032

working papers series


Download This Paper

Date posted: August 12, 2011 ; Last revised: May 10, 2013

Suggested Citation

Ceccagnoli, Marco and Higgins, Matthew John and Palermo, Vincenzo, Behind the Scenes: Sources of Complementarity in R&D (January 31, 2013). Available at SSRN: http://ssrn.com/abstract=1908940 or http://dx.doi.org/10.2139/ssrn.1908940

Contact Information

Marco Ceccagnoli
Scheller College of Business, Georgia Tech ( email )
800 W Peachtree St. NW
Atlanta, GA 30308-0520
United States
Matthew John Higgins
Georgia Institute of Technology - Scheller College of Business ( email )
800 West Peachtree Street
Atlanta, GA 30308
United States
404-894-4368 (Phone)
404-894-6030 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Vincenzo Palermo (Contact Author)
University of Toronto - Munk School of Global Affairs ( email )
Toronto, Ontario
Canada
Feedback to SSRN


Paper statistics
Abstract Views: 629
Downloads: 122
Download Rank: 134,286
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.312 seconds