Innovation and Creativity
Show Less

Innovation and Creativity

Pillars of the Future Global Economy

Edited by Filip De Beule and Ysabel Nauwelaerts

This book brings together different insights into the importance of innovation and creativity to build competitiveness in the European industry and society from different angles.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 7: Do firms benefit from investing in basic scientific research? An empirical investigation for pharmaceutical firms

Stijn Kelchtermans, Bart Leten and René Belderbos


Nelson (1959) has argued that a private enterprise economy fails to provide adequate incentives for firms to invest in basic (scientific) research, due to the uncertain nature of basic research and appropriability problems of the outcome of basic research, that is, knowledge. Despite these difficulties, there may be rational reasons for profit-seeking private firms to conduct basic research with their own research money (Rosenberg, 1990). Firms that perform basic research may benefit, for example, from ‘first-mover advantages’. First-mover advantages refer to a wide set of advantages that firms can obtain from being the first to possess new knowledge resulting from basic research, such as the acquisition of valuable assets (whose value becomes apparent from the new knowledge) or the creation of new products and production processes which, in case of effective patent protection, may (at least temporarily) block competing firms. In addition, firms can improve the efficiency of their technology activities by doing basic research. Scientific knowledge, resulting from basic research activities, helps firms to gain a better understanding of the technological landscape in which they search for new inventions, informs them about the most profitable directions for applied research, and helps them to better interpret findings of applied research (Rosenberg, 1990; Fleming and Sorenson, 2004). Internal basic research capabilities also allow firms to better monitor, interpret and absorb scientific knowledge that is conducted externally to firms (Cohen and Levinthal, 1990; Gambardella, 1992).

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.