Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy

No 2017/13: Firm Capabilities, Technological Dynamism and Innovation Internationalisation – a Behavioural Approach

Torben Schubert (), Elisabeth Baier () and Christian Rammer ()
Additional contact information
Torben Schubert: CIRCLE, Lund University, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden
Elisabeth Baier: HWTK, Baden-Baden, Postal: Germany
Christian Rammer: ZEW, Mannheim, Postal: Germany

Abstract: We develop a behavioural framework of bounded rational decision-making under uncertainty by which we analyse the effect of technological dynamism in the firm’s environment on its decisions to internationalise innovation. Arguing that the firm’s technological performance lev-el affects its risk-preferences, a key-prediction is that firms with low technological compe-tences will internationalise innovation when faced by technological uncertainty while firms with high competences will withdraw from international innovation. A fully rational absorptive-capacity framework would predict the opposite relationship because it ignores the role of dif-ferential risk-preferences. We test our framework using data from the German Community Innovation Survey (CIS).

Keywords: innovation internationalisation; speed of technological change; bounded rationality; prospect theory; uncertainty; technological capabilities

JEL-codes: F21; F23; L22; O32

52 pages, September 1, 2017

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201713_schubert_et_al.pdf PDF-file 

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