Abstract

Successful innovation in firms depends on the developmentand integration of new

knowledge into the innovation processes, which usually comesfrom different sources.

Largely, industrial and innovation economics literaturestudies the degree to which

internal and external knowledge sources are complementary orsubstitutes for the

innovation process. This chapter discusses the relevance ofinnovation complementarities

for developing economies with specific focus on policyimplications. As an illustrative

case, the chapter presents an application of moderncomplementarity tests (super and sub

modularity tests) to a knowledge-intensive business servicessector from an emerging

economy. The chapter uses technological micro data ofsoftware firms of Argentina and

considers estimation results in light of industrial policyimplemented in the country.