Firms' Supply Chain Integration, R&D Collaboration, and Impact on Competitiveness: Evidence from Czechia

This paper aims to reveal associations between firm strategies for vertical supply chain integration and strategy for horizontal R&D collaboration through the analysis of four Czech regions. Drawing on evolutionary economic geography and global production networks literature, we applied a combinatorial and dynamic view on firms' supply chain integration, R&D collaboration, and impact on competitiveness. Conceptually, we argue that companies not only produce and sell goods at different levels (global, national, regional), but are located in differently developed regions and innovation systems with different institutional qualities. Therefore, various modes of engagement within vertical supply chains and at the same time different R&D collaboration strategies influence competitiveness of firms. Empirically, we revealed that the vertical integration strategy drives levels of regional R&D collaboration for a firm. It turns out that globally more connected and technologically sophisticated firms are not highly interconnected by R&D collaboration within regional/national innovation systems. Moreover, technologically capable firms with little or no R&D collaboration may be highly profitable on average, but they are vulnerable in the long run. Furthermore, an intensive involvement in R&D collaboration had the highest resistance towards economic shocks. We also found statistically significant positive relationship with medium R&D collaboration and productivity of firms.