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This paper contributes to an empirical validation of R&D outsourcing by integrating the influence of internal capabilities, network resources and appropriation mechanisms. Internal capabilities refer to internal R&D and human capital. Network resources account for decisions to outsource R&D which co-depend on informal incoming knowledge spillovers. Appropriation accounts for formal and informal knowledge protection mechanisms. This empirical study discusses the determinants of R&D outsourcing with respect to various theories of the firm that complement each other.
Data from the Third and Fourth European Community Innovation Survey for Belgium reveal internal R&D intensity to exert a strong positive association with R&D outsourcing intensity, emphasising the importance of absorptive capacity and the complementary nature of internal and outsourced R&D. Network resources are also positively associated, suggesting that firms involved in a mixture of informal and formal networks tend to outsource relatively more R&D. In terms of appropriation mechanisms there is a positive association formal and informal protection, but this last mostly through complexity of design.
