Exploring and exploiting external knowledge: the effect of sector and firm technological intensity

Abstract

This paper analyses whether the technological environment in which firms operate conditions the opening up of the innovation process, or whether it is the firm’s R&D efforts, regardless of the sector it operates in, that determine to a greater extent the firm’s capacity to explore and exploit external knowledge. Using negative binomial models, the paper analyses the effect of external sources of knowledge on innovation outputs, and the moderator effect of technological intensity of the sector and firm. Results show that the most R&D intensive firms and sectors explore external sources of knowledge to a greater extent than those which are less R&D intensive. In contrast, no substantial differences emerge with regard to the exploitation of these sources. Results also show that opening up the innovation process is not a sectoral phenomenon, since there are significant differences in the use of external sources within the industry itself. Highly open, dynamic and innovative firms can be found in low technology-intensive sectors, indicating that heterogeneity in intra-industrial innovative behaviour should be taken into account when formulating sector-based policies to support the opening up of the innovation process