Innovation and productivity in developing countries: A study of Argentine manufacturing firms’ behavior (1992-2001)

Following the methodology employed in studies for industrialized countries and using panel data from innovation surveys in Argentina with information for 1992-2001, this paper contributes to the nascent literature that analyzes the determinants of innovative inputs and outputs and their impacts on manufacturing firms’ productivity in developing countries. The econometric results show that in house R&D and technology acquisition expenditures have positive payoffs in terms of enhanced probability of introducing new products and/or processes to the market. In turn, innovators attain higher productivity levels than non-innovators. The results also show that large firms have a higher probability of engaging in innovation activities and of becoming innovators.     

Selective search, sectoral patterns, and the impact on product innovation performance

The shift toward more open and interconnected innovation activities has been a major topic in recent academic and practitioner discussions. Firms must connect their in-house R&D activities with external partners, such as leading customers or universities, to increase the effectiveness of their innovation activities. Hence, management needs to define where to search for valuable knowledge in its environment. In this paper we argue that knowledge search has to reflect the heterogeneity of various knowledge sources with regard to the knowledge they can provide and how these sources can be activated. We hypothesize that search strategies driven by science, suppliers and the product market will contribute differently to innovation success with new-to-market versus imitated products. Moreover, we explore the effect of these types of knowledge search within different sectoral patterns of innovation. Our empirical analysis rests on a sample of almost 5000 firms from five Western European countries. The results support our hypotheses and highlight the potentials and shortcomings of different types of knowledge search.     

Managing external knowledge flows: The moderating role of absorptive capacity

In this paper, we argue that those firms with higher levels of absorptive capacity can manage external knowledge flows more efficiently, and stimulate innovative outcomes. We test this contention with a sample of 2265 Spanish firms, drawn from the Community Innovation Surveys (CIS) for 2000 and 2002, produced by the Spanish National Statistics Institute (INE). We find that absorptive capacity is indeed an important source of competitive advantage, especially in sectors characterized by turbulent knowledge and strong intellectual property rights protection. The implications for management practice and policy are also discussed.     

Gaining from interactions with universities: Multiple methods for nurturing absorptive capacity

This paper examines the various methods through which firms benefit from interactions with universities, arguing that such benefits are instrumental in nurturing the multiple facets of a firm's absorptive capacity. We bring together data collected from a survey of UK firms that collaborated with universities, and firm-level data on past partnerships with universities. The results show that benefits from interactions with universities are multifaceted, including enhancement of the firm's explorative and exploitative capabilities. Results also indicate that firms’ R&D commitments, geographical proximity to and research quality of university partners have a distinct impact on the different types of benefits from interactions with universities. We find geographical proximity is crucial for assessing problem-solving as an important benefit, while interactions with top quality universities have a positive influence on the benefits associated with firms’ downstream activities. We discuss the implications of these findings for research and policy.     

R&D support programs in developing countries: The Turkish experience

In this study, the determinants of private R&D investment are examined at the level of firms in the Turkish manufacturing industry. We focus our attention on the effect of public R&D support programs. Our findings indicate that public R&D support significantly and positively affects private R&D investment. There seems to be even an “acceleration effect” on firm-financed R&D expenditures. Smaller R&D performers benefit more from R&D support and perform more R&D. In addition, technology transfer from abroad and domestic R&D activity show up as complementary processes. Given the scarcity of studies on R&D support in technologically weaker economies, our hope is that the less-developed countries can exploit these findings in constructing socially beneficial technology policies.     

Complementarities of innovation activities: An empirical analysis of the German manufacturing sector

Innovation strategies in manufacturing often involve internal R&D activities as well as external partnerships. Thereby it is not clear if internal and external activities are complements or substitutes. This paper tests for complementarity of different innovation activities, i.e. internal R&D, R&D contracting, and R&D cooperation. The empirical analysis of cross-sectional firm level data of the German manufacturing sector comprises both indirect and direct complementarity tests; it is based on data from the German part of the Community Innovation Survey (CIS 3). The results provide evidence for significant complementarities between internal R&D and R&D cooperation, but cast doubt on the complementarity of internal and contracted R&D, since a productivity effect on firms’ patenting probability or sales with new products cannot be found.     

The effect of financial constraints, absorptive capacity and complementarities on the adoption of multiple process technologies

This paper investigates the factors affecting the multiple adoption of new process technologies in manufacturing. We focus our attention on the effect of both financial resources and absorptive capacity on the decision to introduce the technology. We argue in favour of a negative effect of financial constraints and provide reasons for a differential effect of internal and external R&D on innovation adoption. Additionally, the methodology allows us to consider the possible complementarities arising when firms adopt several new process technologies. Our results show that financial constraints are dependent on the technology analyzed, whereas only internal R&D investments are strong predictors of adoption. We are also able to present evidence that the three technologies analyzed (numerically controlled machines, computer aided design and robotics) are, to some extent, complementary.     

Innovation and firm growth in high-tech sectors: A quantile regression approach

We relate innovation to sales growth for incumbent firms in high-tech sectors. A firm, on average, experiences only modest growth and may grow for a number of reasons that may or may not be related to innovative activity. However, given that the returns to innovation are highly skewed and that growth rates distributions are heavy-tailed, it may be misleading to use regression techniques that focus on the ‘average effect for the average firm’. Using a quantile regression approach, we observe that innovation is of crucial importance for a handful of ‘superstar’ fast-growth firms.     

R&D cooperation and failures in innovation projects: Empirical evidence from French CIS data

The second French Community Innovation Survey (CIS) indicates that 14% of R&D collaborating firms had to abandon or delay their innovation projects due to difficulties in their partnerships, an outcome which we term “cooperation failures”. Controlling for sample selection on the cooperation decision, our estimates show that firms collaborating with competitors and public research organizations (PROs), especially when they are foreign, are more likely to delay or stop an innovation project because of difficulties encountered in their R&D partnerships. More surprisingly, firms collaborating with their suppliers also face a higher risk of “cooperation failures”. At least for PROs, firms can reduce the risk of “cooperation failures” through previous experiences in partnerships. Larger firms and group subsidiaries are less likely to face “cooperation failures”, and so do firms in industries with a strong appropriability regime.     

University-industry collaborations in Japan: The role of new technology-based firms in transforming the National Innovation System

This paper examines the role of new technology-based firms in university/industry collaborative (UIC) activities in Japan. UIC activities have been widely diffused into small startup firms over the past 5 years, according to quantitative analysis of RIETIs UIC Survey. In this paper, it is found that these smaller firms achieve higher productivity through UICs than large firms. In light of the findings of this paper, it appears that UICs are gaining momentum and are likely to play a strong role in reducing the dependence of Japan's system of innovation on in-house R&D conducted within large corporations.     

Diversification and hybridization in firm knowledge bases in nanotechnologies

The paper investigates the linkages between the characteristics of technologies and the structure of a firms’ knowledge base. Nanotechnologies have been defined as converging technologies that operate at the nanoscale, and which require integration to fulfill their economic promises. Based on a worldwide database of nanofirms, the paper analyses the degree of convergence and the convergence mechanisms within firms. It argues that the degree of convergence in a firm's nano-knowledge base is relatively independent from the size of the firm's nano-knowledge base. However, while firms with small nano-knowledge bases tend to exploit convergence in each of their patents/publications, firms with large nano-knowledge bases tend to separate their nano-R&D activities in the different established fields and achieve diversity through the juxtaposition of the output of these independent activities.     

US faculty patenting: Inside and outside the university

In a sample of 5811 patents with US faculty as inventors, 26% are assigned solely to firms rather than universities as dictated by US university employment policies and Bayh-Dole. We relate assignment to patent characteristics, university policy, and inventor field. Patents assigned to firms (whether established or start-ups with inventor as principal) are less basic than those assigned to universities suggesting firm assigned patents result from faculty consulting. Assignment to inventor-related start-ups is less likely the higher the share of revenue inventors receive from university-licensed patents. Firm assignment also varies by inventor field and whether the university is public or private.     

Performance of Spanish universities in technology transfer: An empirical analysis

This paper investigates the performance of universities in the transfer of technology using a unique university-level dataset for Spain. The results suggest that universities with established policies and procedures for the management of technology transfer perform better. Universities with large and experienced technology transfer offices (TTOs) generate higher volumes of contract research, but the TTO characteristics appear to matter less for university performance in terms of licensing and creation of spin-offs. Furthermore, universities with a science park perform better than those without, which suggests that the agglomeration of knowledge close to universities has a positive effect on universities’ technology transfer performance.     

The temporal trajectories of innovative search: Insights from public hospital services

This article explores the temporal trajectories of innovative search. Drawing on conceptual ideas from the behavioural theory of the firm, it proposes that the level of temporal persistence in organisations’ innovative search activities is affected by four key factors. These include (i) the mode of innovative search as well as organisations’ (ii) strategic aspirations, (iii) slack resources and (iv) performance feedback. This conceptual model is tested in the context of public hospital services in England. Results from dynamic panel data analyses reveal stronger temporal persistence in science- than in practice-based innovative search activities. Findings also suggest that specialist hospitals relying on a continuous stream of new products, services and processes to meet their strategic aspirations are better positioned to sustain science-based innovative search activities than their generalist counterparts. Similarly, results uncover a positive association between the availability of financial slack and hospitals’ ability to continuously engage in superior levels of science-based innovative search. Contrary to theoretical expectations, however, positive performance feedback does not appear to have any persistence-enhancing effect.     

The point of view of firms in Minas Gerais about the contribution of universities and research institutes to R&D activities

The purpose of this paper is to analyze the interactions between firms, universities and research institutes based in Minas Gerais, Brazil. The theoretical standpoint is the innovation system of developing countries. Multivariate cluster analysis is used, more specifically, the Grade of Membership method, to group firms with similar characteristics and evaluate their pattern of interaction with universities and research institutes. The main results show that the highest rates of interaction are found among firms that manufacture chemical products, cellulose, paper and paper products, followed by those engaged in the extraction of metallic and non-metallic minerals.     

Innovation and firm performance in developing countries: The case of Pakistani textile and apparel manufacturers

Using unique innovation survey data collected from a homogenous sample of firms in Pakistan, this paper presents an analysis of the firm level determinants of product innovation and its impact on firm performance. We employ a multi-stage structural model linking the decision of a firm to innovate, its innovation investment, product innovation, and firm performance using primary data from the textile and wearing apparel sector, which is the largest export sector of Pakistan. We find that product innovation leads to increased labor productivity as well as higher labor productivity growth. A 10 percent increase in innovative sales per worker is associated with a greater than 10 percent increase in labor productivity and labor productivity growth. On the determinants of innovation, we find that vertical knowledge flows from foreign clients and suppliers are important determinants of a firm's decision to innovate. Larger firms are more likely to engage in innovation, however, there is no significant evidence that they invest more in innovation. Exporting is positively associated with innovation performance and firms exporting to Europe and America are more likely to engage in innovation. There is mixed evidence on the impact of competition: foreign competition adversely affects a firm’s decision to innovate, whereas, local competition increases investment in innovation. Subsidies seem to have a crowding out effect since firms receiving national subsides invest less in innovation. Furthermore, firms that have higher investment in innovation, that are more productive, and that introduce organizational innovations have higher innovative sales per worker.     

Cooperation in innovation activities: The importance of partners

This paper analyses the importance of cooperation partners for the development of innovation activities. We contribute to the literature on cooperation in innovation activities that seeks to identify the characteristics differentiating cooperative from non-cooperative firms by proposing a different approach to this problem. We distinguish firms according to their evaluation of cooperation partners in the development of innovation activities. We apply a probit selection model to account for the firm's decision to cooperate (or not). The data we use come from the Portuguese Third Community Innovation Survey. Our estimation results show that firms from high-technological industries, with higher levels of absorptive capacity and of innovation investment, who give importance to incoming spillovers management, and who cooperate with firms from the same group or with suppliers, place greater value on cooperation partners in the innovation process. Additionally, we also find that the factors influencing the importance attributed to cooperation activities are different from the ones behind the decision to cooperate.     

Applying open innovation in business strategies: Evidence from Finnish software firms

Our study aims at shedding light on the innovative business strategies in the software sector and understanding better the economics that underlies the supply of Open Source Software (OSS). We use survey data collected from 170 Finnish software companies to investigate how different properties of software firms, such as size, age, intellectual capital, absorptive capacity, and ownership structure affect their decisions to base their business strategies on OSS supply or proprietary distribution of products and services.Our empirical findings indicate that the adoption of technologically advanced strategies requiring complex legal and managerial knowledge, such as the OSS supply strategy, demands relatively highly educated employees. The support for and development of an education system providing highly skilled people from different fields are essential for the firms’ successful adoption of innovative business strategies. We also find that market entrants have largely driven the OSS adoption, but there are no significant age-related differences in the adoption behavior of incumbent software firms.     

Manufacturing dynamics and spillovers: The case of Guangdong Province and Hong Kong, Macau, and Taiwan (HKMT)

In this paper we characterize the extent of economic integration between Guangdong, Hong Kong, Macau, and Taiwan (HKMT). We do not find, for the period of 1999-2003, consistent evidence that economic activity on the part of HKMT-funded companies contributed to productivity growth in Guangdong domestic manufacturing firms. Furthermore, HKMT-funded companies were less active than Guangdong domestic companies in pursuing research and development (R&D) and innovation activities. Given that HKMT-funded companies in Guangdong are dominated by companies from Hong Kong, we end by linking our results to a discussion of recent innovation policy actions, both in Hong Kong SAR and Guangdong province.