Human resource management and learning based on in-house R&D in a developing country context
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This paper investigates the influence of human resource management practices on the likelihood that a firm performs in-house R&D. The latter is broadly interpreted as learning---a mechanism promoting absorptive capacity and supporting technology capability-building in latecomer firms. The use of distinct definitions of R&D implies different knowledge requirements that firms need to fulfil in order to innovate. The analysis assumes that firms can choose between two learning strategies: they may exploit existing knowledge, or perform more complex explorations and acquire new knowledge. Different knowledge requirements, in turn, underpin distinct R&D outcomes with varying degrees of novelty, at least for the firm. Unlike the recurrent interest in recent catching up experiences of countries, such as India, findings in this paper are supported with evidence from the pharmaceutical industry in Mexico. The analysis reveals some linkages between management practices and learning at firm level. Such influence increases with the novelty of the knowledge required by the firm. Learning to improve or enhance generic drugs is somewhat more demanding than imitative R&D.