In-house versus external basic research and first-to-market innovations

•Doing internal basic research enhances the probability to bring new products ahead of competitors.•In high and med-high tech sectors, it takes at least five years for in-house basic research to bring a new product application to the market.•In-house basic research in low and med-low tech sectors has not only a long-term payoff but also a short-term influence on pioneering innovation outcomes.•Collaboration with universities also helps in introducing new products ahead of rivals; however contracting scientific research to universities has no effect.•Performing internal basic research provides larger payoffs for being a market pioneer than conducting external basic research activities. This paper explores to what extent conducting internal basic research, as opposed to external basic research (i.e. outsourcing and collaboration with universities) encourages firms to bring new products into the market ahead of competitors, and contributes to innovation performance. The analysis is based on a sample of Spanish manufacturing firms over the period 2006–2012. Our findings suggest that conducting in-house basic research affects firm's propensity to introduce product novelties. Furthermore, performing this activity continuously affects the probability of being product-pioneer in low and medium–low tech sectors. Collaboration with universities also helps in introducing new products ahead of competitors, but contracting scientific research from universities does not lead to a pioneer strategy. Results also reveal the absence of complementarities.