When is the whole bigger than the sum of its parts? Bundling knowledge stocks for innovative success

Abstract

As firms engage in building different R&D capabilities, they confront a crucial question: what configuration of knowledge stocks is most likely to increase innovative success? This article argues that the impact of one knowledge stock may depend not just on its level but also on the level of other stocks; furthermore, the interdependencies of firms' existing knowledge stocks might explain performance differences.The authors measure the effects of three pairwise combinations of knowledge stocks on firm innovative success, and find, using an event-history analysis of 843 dedicated biotechnology firms during 1973—99, that one pair is complementary (i.e. intellectual and collaborative capital) and two pairs are substitutive (i.e. human and intellectual and human and collaborative capital).Viewing knowledge complementarities through such a lens gives rise to systems effects and explains when the whole is bigger (or smaller) than the sum of its parts.