Why do firms cooperate for innovation? A comparison of Austrian and Finnish CIS3 results
International Journal of Foresight and Innovation Policy
This paper analyzes differences in the co-operative behaviour of innovative firms in Finland and Austria. We use data from the third wave of the Community Innovation Survey (CIS 3). Descriptive statistics indicate that the rate of innovators is quite similar in Austria and Finland, while the number of co-operating enterprises is considerably higher in Finland. Econometric analysis reveals that a number of factors that determine co-operative arrangements are only significant in one or the other
... ountry. We conclude that co-operative behaviour in the two countries is much more dependent on national factors and much deeper rooted in the underlying innovation systems than the existing literature may assume. The authors want to thank Mikael Åkerblom, Olavi Lehtoranta (Statistics Finland) and Karl Messmann (Statistics Austria) for data supply and preparation. Raimo Lovio and Doris Schartinger have contributed helpful comments on an earlier version of the paper. The authors are also grateful to Tekes for supplying the information about publicly subsidized firms. The Finnish part of the analysis of this paper was prepared for the project 'Dynamic Patterns of Innovative Activities among Finnish Firms', funded by Tekes and the Finnish Ministry of Trade and Industry. The authors gratefully acknowledge the resources supplied by Tekes and the Ministry to carry out this research. Furthermore, the support of the DAAD is acknowledged. This paper examines cross-country differences in co-operative behaviour of innovating firms between Austria and Finland: Finnish firms, while showing a comparable level of innovative activity, exhibit a much higher propensity to enter into co-operations for innovation than their Austrian counterparts. This fact has been brought up by Eurostat's Second Community Innovation Survey (CIS-2; European Commission 2001) and is confirmed by the first results of the Third round of CIS. These differences are surprising to us, as successful innovation is increasingly recognized as requiring the convergence of many sources of knowledge and skills in all sectors of the economy. Empirical evidence for the superior innovation performance of co-operating companies can be found, among others, in Gemunden et al. (1992 ), Palmberg et. al (1999 , Czarnitzki and Fier (2003). Controlling for various exogenous influences, a comparable level of innovative activityshould therefore require a comparable level of mutual learning and transfer of knowledge. Otherwise, firms would turn down the possibility to improve innovative performance. Moreover, the theoretical literature -at least in the neoclassical tradition -offers only little explanation for these cross-country differences. It explains the motives for co-operation as being intrinsic to the firm and its strategy and as a result of external constraints. Vonortas, Caloghirou and Ioannides (2003) list, among other, the sharing of R&D cost and risk, the reduction of duplication, spillover internalisation, access to complementary resources and knowledge, or the promotion of standards as relevant motives for joint ventures in innovation. These advantages of co-operation should be valid both for Austrian and Finnish firms to a comparable degree. This paper analyzes the co-operative behaviour of innovative firms in Austria and Finland with data from the third wave of the Community Innovation Survey (CIS 3). It is structured as follows: Chapter 2 provides a brief theoretical background of the ongoing discussion on co-operative behaviour. Chapter 3 gives some descriptive features of the datasets. An econometric analysis of the co-operative behaviour is delivered in chapter 4. Chapter 5 summarizes the main findings and concludes with some directions for future research. Theoretical background Theoretical approaches like the knowledge-based view, as well as the resource-based view are increasingly criticised in recent discussions of co-operative behaviour due to their emphasis of firm-specific capabilities only. Although both approaches emphasize that firms do have dynamic capabilities in order to sustain their competitive advantage, it has to be ascertained the these approaches lack an explanation, how these sources of competitive advantage are built up. The reason for this can be seen in the neglect of the firms' network of external relationships. As a consequence of this critic, the so-called relational-based view of the firm (Dyer and Sing 1998) has emerged which focuses on inter-firm relationships as a source of competitive advantage. According to this view, competitive advantages cannot be generated by a firm in isolation but only in collaborative relationships with other actors, namely other firms (including competitors) but also institutions which were created with the purpose of knowledge generation (i.e. universities and public research laboratories), as well as vertically linked actors (as suppliers and customers). These co-operations are characterized by intensive knowledge exchange and learning processes basically by the combination of complementary assets as well as the realisation of synergies.