Using panel micro data fro\m Community Innovation Survey in the Czech Republic, Norway and the UK, we estimate dynamic random effects models, in which the innovation output of firms is the function of their cooperative behaviour and other observed characteristics, while accounting for unobserved heterogeneity. The results indicate that the capacity of firms to build on external domestic linkages is what matters most for their innovation output and that external foreign cooperative linkages lead to superior innovative performance only if combined with the domestic ones. Hence, the findings support the take on globalization prevalent in innovation studies that the home base continues to matter and back up the arguments in geography of innovation on the importance of combining local and distant interactions.
