How Can Firms’ Basic Research Turn Into Product Innovation? The Role of Absorptive Capacity and Industry Appropriability

We explain why companies seeking superior product innovation should invest in basic research. Our arguments highlight the role of absorptive capacity and examine how industry appropriability influences these relations. Based on a rich dataset of 8416 firms, we argue that basic research in firms increases their knowledge stock and flows, therefore improving their capacity to identify, assimilate, a…