R&D Cooperation: Direct and Indirect Effect and Complementary. An Oaxaca-Blinder Decomposition for a Developing Country

Abstract This paper examines the influence of R&D cooperation on the likelihood of obtaining technological innovations among manufacturing firms in Argentina. Using firm-level data from a national innovation survey, it distinguishes between the direct (output) and indirect (input) effects of cooperation by applying the Oaxaca–Blinder decomposition technique—rarely used in innovation studies. Indirect effects are assessed as complementarity or substitutability between R&D cooperation and a broad set of innovation activities, including both R&D and non-R&D efforts. The analysis also considers variations across technological sectors and types of cooperation partners (science and technology institutions vs. business partners). Results reveal a significant innovation performance gap in favour of cooperating firms. However, this gap is driven not by the direct or indirect effects of cooperation, but by firm characteristics—namely, internal R&D and the use of external information sources. Consequently, no evidence of complementarity or substitutability is found. These findings are consistent across sectors. The paper concludes with policy implications and future research directions.