Prague Economic Papers 2021, 30(3):272-289 | DOI: 10.18267/j.pep.771

Does It Pay to Have Your Own R&D Department? In-house and External R&D in the Context of Innovations

Jacek Lewkowicz ORCID...a,b, Anna Lewczuk ORCID...a
a University of Warsaw, Faculty of Economic Science, Warsaw, Poland
b National Bank of Poland, Warsaw, Poland

What type of R&D is essential for creating innovations? Is in-house R&D more efficient than purchasing external innovations? The question of various strategies for private firms to succeed in developing innovations is key for ongoing national and international programmes for raising innovativeness of economies. The goal of the paper is to investigate the outcomes of different types of R&D in the context of innovations and to analyse their significance in European countries empirically. In this paper, we aim to provide a quantitative analysis of the problem on the data collected from the Common Innovation Survey. We cover innovations in products, services, production methods, distribution systems and supporting activities. The results suggest that both in-house and external R&D matter for firms' innovativeness, but the effect is stronger for the former for most of the types of innovations considered.

Keywords: Innovations, internal R&D, external R&D
JEL classification: D22, O31, O32, O33

Received: April 4, 2020; Revised: September 22, 2020; Accepted: December 7, 2020; Published: June 11, 2021  Show citation

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Lewkowicz, J., & Lewczuk, A. (2021). Does It Pay to Have Your Own R&D Department? In-house and External R&D in the Context of Innovations. Prague Economic Papers, 30(3), 272-289. doi: 10.18267/j.pep.771
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