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Externalities of openness in innovation
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Roper, Stephen, Vahter, Priit and Love, James H. (2013) Externalities of openness in innovation. Research Policy, Volume 42 (Number 9). pp. 1544-1554. doi:10.1016/j.respol.2013.05.006 ISSN 0048-7333.
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Official URL: http://dx.doi.org/10.1016/j.respol.2013.05.006
Abstract
Discussion of open innovation has typically stressed the benefits to the individual enterprise from boundary-spanning linkages and improved internal knowledge sharing. In this paper we explore the potential for wider benefits from openness in innovation and argue that openness may itself generate positive externalities by enabling improved knowledge diffusion. The potential for these (positive) externalities suggests a divergence between the private and social returns to openness and the potential for a sub-optimal level of openness where this is determined purely by firms’ private returns. Our analysis is based on Irish plant-level panel data from manufacturing industry over the period 1994–2008. Based on instrumental variables regression models our results suggest that externalities of openness in innovation are significant and that they are positively associated with firms’ innovation performance. We find that these externality effects are unlikely to work through their effect on the spread of open innovation practices. Instead, they appear to positively influence innovation outputs by either increasing knowledge diffusion or strengthening competition. Our evidence on the significance of externalities from openness in innovation provides a rationale for public policy aimed at promoting open innovation practices among firms.
Item Type: | Journal Article | ||||
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Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management |
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Divisions: | Faculty of Social Sciences > Warwick Business School > Entrepreneurship, Innovation & Management Faculty of Social Sciences > Warwick Business School > Strategy & International Business Faculty of Social Sciences > Warwick Business School |
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Library of Congress Subject Headings (LCSH): | Technological innovations , Research, Industrial , Production management -- Ireland, Industrial management | ||||
Journal or Publication Title: | Research Policy | ||||
Publisher: | Elsevier BV | ||||
ISSN: | 0048-7333 | ||||
Official Date: | 2013 | ||||
Dates: |
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Volume: | Volume 42 | ||||
Number: | Number 9 | ||||
Page Range: | pp. 1544-1554 | ||||
DOI: | 10.1016/j.respol.2013.05.006 | ||||
Status: | Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Restricted or Subscription Access | ||||
Date of first compliant deposit: | 26 December 2015 | ||||
Date of first compliant Open Access: | 26 December 2015 | ||||
Funder: | Economic and Social Research Council (Great Britain) (ESRC), Tartu Ülikool [University of Tartu] (Tartu, Estonia) | ||||
Grant number: | RES-062-23-2767 (ESRC) |
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