Exploration during turbulent times an analysis of the effects of R&D cooperation on radical innovation performance during the economic crisis

Abstract

During the recent economic recession, firms have been less willing to invest in innovation, which often is an uncertain and long-term process. This reduction did not occur equally for all firms, and recent literature has analysed the characteristics of those firms which maintain or even raise their innovative efforts during the crisis. Technological collaboration has been recognised as one of the most important external sources that affects innovation performance. However, how economic recession has changed the impact of R and D collaboration on innovation performance has received few attention. This paper investigates the effect of different external cooperation patterns of firms before and during the last economic recession. We highlight the role of geographical and organizational diversity of knowledge sources, as well as the effect of past experience. We find that R and D cooperation has a stronger effect on radical innovation performance during the economic recession than before, this being true irrespectively of the geographical location of the partners. This benefit from cooperation during the economic turmoil is higher in the case of firms having a diverse portfolio of partners. In addition, we also find that past experience in R and D cooperation positively affects innovation performance during the crisis.