Perceived external R&D purchases and internal R&D expenditures as innovation drivers in large Ecuadorian firms

Type of the article: Research ArticleAbstractThis study examines the relationship between external R&D purchases and internal R&D expenditure with technological and non-technological innovation in large Ecuadorian companies, using internal R&D expenditure as a mediating variable and company age as a moderating variable. A structured survey was administered in 2024 to the CEOs of 380 large companies in Ecuador’s three main business centers: Guayaquil, Quito, and Cuenca. Data were analyzed using PLS-SEM. The results confirmed that internal R&D expenditure is the main driver of reported innovation, with large direct effects on technological (β = 0.545; p < 0.001; f² = 0.434) and non-technological innovation (β = 0.526; p < 0.001; f² = 0.400). External R&D purchases directly affect non-technological innovation (β = 0.178; p < 0.001) and internal R&D expenditure (β = 0.308; p < 0.001; f² = 0.105), with significant indirect effects on both types of innovation (β = 0.168 and 0.162; p < 0.001). The model explains 37.9% of the variance in technological innovation and 37.5% of the variance in non-technological innovation (Q² > 0). Firm age negatively moderates the external R&D purchases–technological innovation relationship (β = −0.141; p = 0.045), a pattern consistent with younger firms relying more on external R&D purchases for technological innovation, although this interpretation requires caution given the moderate significance of the effect. Therefore, internal R&D expenditure relates to reported outcomes of innovation, while external R&D purchases appear to contribute mainly to the development of internal R&D.