Doing R&D in a closed or open mode: Dynamics and impacts on productivity
Julio Miguel Rosa & Pierre Mohnen
#2013-060
On the one hand, firms prefer to perform R&D in an open mode (letting
R&D be performed extramurally or even selling their R&D services) to
benefit from knowledge spillovers and complementarities between internal
and external R&D. On the other hand, they may also like to perform R&D
in a closed mode (funding and executing their R&D intramurally) to
minimize outgoing externalities. We examine the dynamic process by which
firms change the way of doing R&D and how these strategic choices of
doing R&D affect their productivity growth. This study is based on the
Statistics Canada Research and Development in Canadian Industry survey
(RDCI), which collects data on R&D performed in the business sector in
Canada. The paper is based on data for the period 1997 to 2006. The
panel dimension of the data allows to control for unobserved
characteristics of R&D performers by estimating a multinomial Logit
model with unobserved heterogeneities using maximum simulated likelihood
(MSL) method.
Keywords: R&D; State Dependence; Dynamic Multinomial Logit; Panel-data;
Maximum Simulated Likelihood; Open Innovation
JEL Classification: C35, L23, 032, 033
