Innovation, R&D cooperation and labor recruitment: evidence from Finland

Abstract

This article investigates the role played by one type of firm interaction, namely R&D cooperation, and also the acquisition of labor, in the promotion of industrial innovations. We employ a unique innovation dataset from Finland which combines firm specific information about the innovation performance of the firms along with their individual characteristics, as well as firm specific information regarding the origins of their recent labor acquisitions. Analyzing this data allows us to identify the different roles which the knowledge spillovers and labor markets play in the innovation process. Our results suggest that small firms are generally more innovative than large firms; R&D cooperation is an essential feature of innovation, but the variety of cooperation is of little importance; and labor acquisition appears to be only of limited importance for innovation.