Dynamic complementarities in innovation strategies

Using a panel of Irish manufacturing plants over the period 1991–2008 we test for dynamic complementarities in the joint use of internal R&D and external knowledge sources. We find little evidence, either from considering successive cross-sectional waves of comparable surveys, or in terms of the strategy switch choices of specific plants, that there has been a systematic move towards the joint use of internal and external knowledge in innovation. We then test formally for the presence of complementarities in the joint use of internal R&D and external innovation linkages. In static terms we find no evidence of complementarity, but in dynamic terms find evidence that strategy switches by individual plants towards a more ‘open’ strategy are accompanied by increased innovation outputs.