Contextual Effects on the Complementarities Between R&D Activities: An Empirical Analysis of the Korean Manufacturing Industry

Firms undertake various R&D activities to generate commercializable innovations and to create and sustain competitive advantage. However, mere exploitation of various R&D opportunities has no conclusive impacts on a firm's competitive advantage in innovation, since R&D activities might closely interact with each other and their appropriate combination would have a synergy effect on a firm's innovation performance. The aim of this paper is to explore various contextual factors behind synergy effects derived from interactions between R&D activities based on the economic and technological sources of the R&D complementarities, such as absorptive capacity, knowledge flows, and uncertainty, as well as to examine the existence of complementarities between corporate R&D activities, using the 2004 innovation survey data of Korean manufacturing industries. The corporate R&D activities considered in this study are in-house R&D, R&D cooperation, and commissioned R&D. Our research concludes that there exists a complementary relationship between a firm,s internal R&D and R&D cooperation activity. In addition, our study discovered that the complementarity between R&D activities relies on the organizational contextualities, a firm's cumulative patent stocks, perceived level of imitation risk, experience of external knowledge acquisition, and information inflows from public research institutes and universities?that lie hidden under the firm-specific activities.