Innovating firms can choose to engage in either internal or external R&D, or in both. In the current study, we shall examine internal and external R&D separately to determine empirically the market structure characteristics explaining the external R&D share and the differences in market structure determinants between internal and external R&D. Our results indicate that a government policy that aims at stimulating technological progress by offering external research facilities is particularly interesting for smaller, capital-intensive firms operating in less concentrated markets.

Netherlands, R&D, research and development
De Economist
Erasmus School of Economics

den Hertog, R.G.J, & Thurik, A.R. (1993). Determinants of internal and external R&D: some Dutch evidence. De Economist, 279–289. Retrieved from