Direct and moderating effects of public R&D support on external knowledge acquisition: the interaction with performance feedback

ABSTRACT

We argue that public R&D support may not only lead firms to increase their technological cooperation breadth, enhancing knowledge acquisition, but also influence how firms frame and approach R&D alliance decisions in response to their innovation performance feedback. From a behavioural perspective it is firms performing above or below innovation aspirations the ones that are more willing to gain access to new sources of external knowledge. We argue that while public funding of a firm’s R&D activities has a positive direct effect on cooperation breadth, it also exerts a negative moderating influence when firms deviate from their innovation aspirations, because managers’ external knowledge acquisition strategies tend to align with the objectives of subsidised projects. Using a panel of technological-intensive Spanish firms, we find support for our hypotheses, showing the importance of incorporating performance feedback as a key factor when analysing the impact of public R&D instruments on firms’ collaborative behaviour.

KEYWORDS:

• R&D subsidies
• behavioural additionality
• cooperation breadth
• performance feedback
• behavioural theory

JEL CLASSIFICATION:

• O32
• O36
• O38

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Note that firms are told to only indicate those partners with whom the firm ‘actively cooperated for technological innovation’ so that outsourcing agreements without active R&D cooperation are not considered.:

² Following Greve (2003a) we estimated the weights by searching all parameters values by increments of 0.1 and we selected the combination offering the best fit of the models to the data (0.5 for a₁ and 0.4 for a₂). In line with previous research, the most recent performance (P) is weighed higher than HA in t-1 (Chen 2008; Tyler and Caner 2016).

³ We opt to pursue this approach due to the potential influence of two key independent variables on firms’ R&D intensity levels. There are studies that use performance feedback models to explain firms’ R&D intensity levels (Chen 2008; Greve 2003a). In addition, existing literature focusing on the input additionality effects of public R&D funding has highlighted the direct impact of public support on firms’ private R&D investments and, consequently, their R&D intensity (Carboni 2017; Jugend et al. 2020).

⁴ Furthermore, a model comparison analysis in STATA (with the user-written count function) showed that the negative binomial regression was the best fitting model (Tyler and Caner 2016).

⁵ These additional analyses are available upon request.

Additional information

Funding

The work was supported by the Spanish Ministry of Economy, Industry and Competitiveness [ECO2017-86101-P]; Spanish Ministry of Science, Innovation and Universities [PID2023-148063NB-100].