Does Openness Matter for Innovation Performance?

Today I had the honor to present some of my most recent work at a seminar at WIFO in Vienna. Here are the slides.

The work is a joint effort with Ammon Salter and Keld Laursen to investigate whether openness does matter for innovation performance. In this paper (here is a draft) we present a replication of Keld’s and Ammon’s 2006 paper published in the Strategic Management Journal (Laursen & Salter, 2006). In our replication we use German innovation survey data surveyed in 2009 for what Hamermesh (2007) would call a scientific replication. In our attempt to replicate the 2006 results derived from a UK data set surveyed in 2001 we use the same operationalization of the variables. In the first step we also employ the same models for estimation. Our results for the German data set are rather comparable to the initial UK results.

In the second step of the replication we use an averaging approach with a clear Bayesian interpretation similar to the one used in Sala-i-Martin et al. (2004). We investigate how much the findings depend on the specification of the model. The overall findings show that some of the most striking findings in the original paper strongly depend on the model chosen for estimation. Our more robust findings in the replication highlight, that openness indeed affects innovation performance positively, yet, in contrast to the initial findings, not in an inverse u-shaped fashion. In contrast to the original findings in the 2006 paper we clearly see complementarity between openness and internal innovation spending. That takes us back to the classic story about absorptive capacity (e.g. Cohen & Levinthal, 1990). In terms of policy implications this finding would even strengthen the argument in our 2010 analysis of innovation policy in selected European economies (Herstad et al., 2010).

A note to the reader of the replication paper: It is best read in combination with the original paper as we have cut down on the theoretical foundation and on the policy relevance in the replication.



Cohen, W.M. & Levinthal, D.A. (1990). Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly, 35 (1), 128–152.

Hamermesh, D. (2007). Replication in economics. Canadian Journal Of Economics, 40 (3), 715–733.

Herstad, S.J., Bloch, C.W., Ebersberger, B. & van De Velde, E. (2010). National innovation policy and global open innovation: exploring balances, tradeoffs and complementarities. Science and Public Policy, 37 (2), 113–124. doi:10.3152/030234210X489590.

Laursen, K. & Salter, A. (2006). Open for innovation: the role of openness in explaining innovation performance among U.K. manufacturing firms. Strategic Management Journal, 27 (2), 131–150. doi:10.1002/smj.507.