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In order to drive innovation and provide sustainable growth, companies allocate substantial resources to Research and Development (R&D). R&D cooperation with external parties can offer possibilities to complement the often limited internal research resources. It also implies potential innovation opportunities and creating new customer value. Thus, implementing open innovation strategies contributes to achieving competitive advantage of companies. This paper examines the relationship between cooperation with external parties and R&D expenditure of manufacturing companies. For the purpose of this study data taken from the European Manufacturing Survey are used. Empirical results revealed that inter-firm relationships in production area and cooperation with research institutions and universities in R&D area tend to decrease the expenditure on R&D, while cooperation with other companies in R&D increases R&D expenditure. The results presented in this study have important implications for managers of manufacturing companies interested in creating competitive advantage through various cooperative activities. © 2019 The Authors. Published by Elsevier Ltd.