Government support and firm innovation performance in Chinese science and technology parks: The perspective of firm and sub-park heterogeneity

Science and technology parks (STPs) are established to promote the firm innovation performance via agglomeration economy and government support in China. On-site qualified firms obtain government R&D funding as a type of government support, and they are offered differential innovation service caused by the differential capabilities of sub-parks which scatter throughout a single city. It is debatable whether those government supports at firm and sub-park levels can promote firm innovation capabilities. This study takes Zhangjiang National Innovation Demonstration Zone, Shanghai as an example. It applies a Tobit regression model to analyse the databases of Zhangjiang Annual Sampling Survey of Firms 2015 and Zhangjiang Development Report 2015. We find out at the firm level, government R&D funding has a significant and positive influence on firms' innovation, but government R&D funding generates a crowing-out effect the innovation performance of on-site firms with more R&D investment themselves. At the sub-park level, innovation service agencies of sub-parks do not exert an important role in influencing firms' innovation, and they even have negative moderating effects on the relationship between firm R&D investment and firm innovation performance. It reflects the mismatch between innovation service of STPs and firms' needs in China.     

Make,Buy, or Both: The Innovation Sourcing Strategy Dilemma after M&A

This paper investigates the effects of mergers and acquisitions (M&A) on corporate research and development (R&D) strategies using firm‐level data on the Spanish manufacturing sector. The focus of the study is to determine whether M&A affects R&D portfolios by increasing or decreasing innovation input, such as in‐house R&D, external R&D or both. The results show that M&A has a negative and significant impact on R&D intensity, decreasing in‐house R&D and external technological sourcing. M&A enables the rationalization of R&D capacity, implying a decrease in R&D efforts. M&A negatively affects both types of R&D, but, on average, the effect is more negative on external R&D.     

Location and the Innovation Performance of Commercial GIS Companies

This paper looks at the role of firm size, location, and in‐house research and development (R&D) in the innovation performance of U.S. firms in the commercial geographic information systems (GIS) industry. Data from a survey of 300 GIS firms are presented. The results suggest that innovation‐intensity varies directly with in‐house R&D spending (scaled as a proportion of company sales), but inversely with company size (total employment). Significant regional variations in the innovation performance of GIS firms are identified. It is argued that the geography of innovation is influenced by the spatial distribution of young and/or small firms, in that R&D‐productivity is found to vary inversely with company size. An important finding is that creative inputs to support innovation are almost evenly divided between internal and external sources. A surprising result is that the academic community is not viewed as a particularly important source of new ideas for innovative firms. The paper concludes with a discussion of the implications of the survey data for future empirical work on the GIS sector.     

A Spatial Analysis of the R&D‐Productivity Nexus at Firm Level

The aim of this paper is to evaluate the effect of research and development (R&D) on productivity by taking into account productivity spillovers. To this end, by using a sample of Italian manufacturing firms over the period 2004–2006 provided by the Xth UniCredit‐Capitalia survey (2008), we have analyzed the role of R&D in firm productivity by using a spatial autoregressive model. In so doing, we have allowed the productivity of each firm to be affected by the productivity of nearby firms. Results show that R&D significantly affects Italian firm productivity and that productivity spillovers across firms matter. Moreover, productivity is found to be positively affected by intrasectoral R&D spillovers, while intersectoral R&D spillovers do not have a significant effect.     

Innovation in the periphery: Compensation and exploitation strategies

Recent research has challenged the urban bias in economic geography and innovation studies, showing that highly innovative and competitive firms are also located in peripheral regions. So far, however, analyses has focused on how firms innovate despite their unfavourable location and little has been said about the innovation benefits of peripheral areas. Hence, this article identifies different compensation and exploitation strategies adopted by firms in order to overcome regional innovation constraints and to reap innovation benefits found in the periphery. Drawing on 20 in‐depth qualitative interviews with innovative firms situated in the Austrian periphery, our analysis reveals that innovation in peripheral regions is the outcome of a combination of compensation and exploitation practices. The uptake and composition of these strategies depend on the firm and regional characteristics, with firm size being the most influential factor.     

The Innovativeness and Heterogeneity of Foreign‐Invested High‐Tech Companies in Shanghai

China has taken a foreign direct investment‐based approach toward increasing its capital and knowledge base, and developing into an innovative economy. However, little quantitative evidence exists about the factors that drive innovations of foreign‐invested enterprises (FIEs) there. This paper uses survey data from high‐technology firms in Shanghai to discuss factors affecting their innovativeness. It takes the concepts of absorptive capacity, export orientation, and innovation‐related cooperation as a starting point. It highlights how the interplay of strategies and resources affects innovativeness and heterogeneity of FIEs. The most innovative FIEs are endowed with a strong human capital base and R&D activities, which at the same time target export markets and whose cooperative partners involve firms other than their parent company. The results underline the necessity to differentiate between the different types of FIEs when examining their innovativeness.     

Extra‐Firm Networks and Firm Performance: A Study of South Korean Solar PV Firms and Industry Specific Government Actors

Extra‐firm actors have been acknowledged as vital to the success of green energy industries. This article deploys the firm network perspective to deliver a first of its kind analysis of specific extra‐firm actor impacts on firm performance in Korea's solar photovoltaic industry. Results are based on quantitative analyses of data from 60 firm respondents and augmented by interviews with eight government officials. Three research questions capture and compare firm and government actor perceptions pertaining to extra‐firm actor influences at the national, regional, and extra‐local scales, inclusive of place–place competition and cooperation. Results indicate that firms differ in perceptions related to the impact of 18 national level government institutes, R&D centers, associations, and academic societies on their success, and that perceptions vary by level of technology concerning a plethora of other related extra‐firm actor and support infrastructure impacts. A comparative perspective is presented based on government informant interviews.     

Gibrat's Law in the “Third Italy”: Firm Growth in the Veneto Region

According to Gibrat's Law of Proportionate Effect, the growth rate of a given firm is independent of its size at the beginning of the period examined. While earlier studies tended to confirm the Law, more recent research generally rejects it. The aim of this paper is to test whether Gibrat's Law is confirmed, for the 1995–2005 period, for a large sample of firms active in the Veneto region of Italy. Controlling for firm age and size, findings show that the Law is not confirmed in the early stages of a firm's life cycle, with younger firms growing faster than established ones, whereas it cannot be rejected once a given threshold in terms of age is reached. These findings are consistent with the life cycle theory of the firm and with the hypothesis that fast growing small and medium‐sized enterprises may have played a role in the evolution and the structural transformation of local systems in the “Third Italy” during the 1990s and early 2000s.     

Regional Variation of Firm Size and Growth: The Portuguese Case

This paper analyses the patterns of firm growth of manufacturing firms across Portuguese regions. In particular, we compare firm size and growth in order to investigate 1) whether region‐specific characteristics, interpreted as generating localization economies, exert any influence on firm growth and size, and 2) whether there is evidence of persistence in firm growth across regions. Using an extensive dataset of Portuguese manufacturing firms and applying parametric and semi‐parametric approaches, we found that, in eleven of the eighteen analyzed regions, firm growth is related to firm size and therefore firms have no equal probabilities of attaining a particular growth rate within any given period. Moreover, the results uncovered that firms experience serial correlation in their growth patterns in all regions and region‐specific characteristics, such as industrial diversity, entrepreneurship potential, and workforce qualities, engender differences in the way firms grow. Thus, this paper adds to the literature by showing how geographic location matters to firm size and growth.     

From R&D to Innovation and Economic Growth in the EU

ABSTRACT Over the last two decades many European governments have pursued ambitious research and development (R&D) policies with the aim of fostering innovation and economic growth in peripheral regions of Europe. The question is whether these policies are paying off. Arguments such as the need to reach a minimum threshold of research, the existence of important distance decay effects in the diffusion of technological spillovers, the presence of increasing returns to scale in R&D investments, or the unavailability of the necessary socio‐economic conditions in these regions to generate innovation seem to cast doubts about the possible returns of these sort of policies. This paper addresses this question. A two‐step analysis is used in order to first identify the impact of R&D investment of the private, public, and higher education sectors on innovation (measured as the number of patent applications per million population). The influence of innovation and innovation growth on economic growth is then addressed. The results indicate that R&D investment, as a whole, and higher education R&D investment in peripheral regions of the EU, in particular, are positively associated with innovation. The existence and strength of this association are, however, contingent upon region‐specific socio‐economic characteristics, which affect the capacity of each region to transform R&D investment into innovation and, eventually, innovation into economic growth.     

Reflections on the “Old” Economy, “New” Economy,and Services

ABSTRACT Economic competitiveness now has less to do with new materials than with new ways of producing, utilizing, and combining diverse knowledges. It is branded as symptomatic of a “new” economy and is often juxtaposed against the “old” economy. As accelerating technological change has greatly increased the volume and quality of the information available to organizations, to firms, and to individual employees, it is asserted that the economy has become more “new” than “old.” But this is predicated on the assumption that there is a “new” economy and that it is somehow distinguishable from the “old.” This paper explores the basis for this dichotomy and whether it really adds anything to understanding contemporary economies and their ongoing development. It will be argued that it is more useful and constructive to examine the economy through a lens dominated by service industries that are now the key drivers of change (innovation, competition, employment) and development. The paper is concluded with a discussion of some items that could usefully be part of an agenda for further research by economic geographers on the evolving spatial and structural attributes of service work and organizations and their impact on cities or regions at different scales of analysis.     

Innovative and Competitive Structure of Regional Economies in Turkey

Regional development theories have experienced a transition from Keynesian state‐led economic development models to development based on public–private partnerships, innovation, industrial districts, etc. With the increasing concern for innovative milieu, products, process, organizational, and institutional innovations have assumed an important place in regional development policies. All these regional development paradigms have formed the basis of the initiation of a new process in regional development called the new regionalism, which includes cumulative efforts to revitalize local economic growth. In this paper, we identify technological levels of 26 NUTS 2‐level regions according to the Organisation for Economic Co‐operation and Development (OECD)'s classification. Then, we develop an innovation and competitiveness index for Turkey by employing principal component analysis. In conclusion, we formulate some workable policy solutions and suggestions for regional economies in Turkey. According to the results, Istanbul is the most innovative and competitive region in Turkey. Ankara is becoming a regional knowledge cluster, thanks to its strong R&D infrastructure and highly qualified researchers.     

Direct and Interactive Effects of Brokerage Roles on Innovation in Clustered Firms

Social network analysis has generated a great number of research findings in the organizational and management literature, in which the so‐called territorial clusters have often been represented through the network metaphor. However, while scholars primarily examine the network structure and the internal heterogeneity, we have specifically analyzed the diverse types or roles of informational brokers which firms can perform. We also posit that innovation generated by these firms is moderated by their own capabilities and, more particularly, we analyze how innovation is affected by brokerage roles and the moderating effect of R&D in the Spanish ceramic tile cluster. Our results show that different brokerage roles played by clustered firms have different implications in terms of innovation. Another relevant and related result refers to the interactive effect of brokerage roles and absorptive capacity, which becomes more or less significant depending on the role being played in each case.     

Diverse diversities—Open innovation in small towns and rural areas

It is generally accepted that cities and other forms of geographic agglomerations are conducive to innovation because their density and variety of firms, sectors and individuals create a diverse environment. However, a growing body of work shows that innovation also occurs in peripheral regions and small towns. Furthermore, work on rural social networks shows that diversity is multidimensional, and that along certain dimensions networks developed in rural areas are more diverse than those observed in cities. In this paper, we develop these arguments, then report our observations of seven successful firms in Swiss small towns. These firms benefit from at least three types of diversity: internal diversity; multiplexed interactions between workers at different hierarchical levels; and external diversity as firms reach beyond the region. We conclude that diversity conducive to firm‐level innovation is not a specifically urban attribute: at least some of its dimensions are present in small towns and more peripheral areas.     

How States Augment the Capabilities of Technology–Pioneering Firms

State governments offer a variety of programs to assist technology intensive entrepreneurial firms yet there is a limited understanding of how firms use these programs. This paper provides a framework for categorizing state technology programs and uses detailed case studies to examine how these programs augment firms’ capabilities. It is concluded that firms made extensive use of state programs that provide access to university intellectual property and research facilities. In addition, firms participated in programs that provided incentives for faculty to conduct joint research with industry. Finally, state venture capital programs, though small relative to federal R&D grants or venture capital, appear to nurture firms’ development.     

The E‐economy and the Rise of Technocapitalism: Networks,Firms, and Transportation

ABSTRACT The e‐economy is part of a larger phenomenon, technocapitalism, that is transforming business organizations and the ways in which they transact, produce, and ship their goods. Technocapitalism is an evolution of market capitalism that is rooted in technological innovation and supported by such intangibles as creativity and knowledge. This paper considers first the main characteristics of networks that support the e‐economy and its source phenomenon, the emergence of technocapitalism. Networks are thought to be the main vehicle through which the e‐economy spreads, and they have major effects on the organization of business firms. The culture of technocapitalism, with its emphasis on continuous innovation and rapid adjustment, is largely behind the rising importance of networks. A second section then considers the deconstruction of business firms and its relation to networks, the e‐economy, and the rise of technocapitalism. A historical perspective is provided to show the contrast with previous eras. The deconstruction of business organizations involves a major transformation of the norms and ways in which firms are run and structured. Finally, the likely implications for transportation and shipping of the rise of the e‐economy, its networks, and the deconstruction of firms are discussed. The logistics, pricing, and infrastructure of shipping are likely to be substantially affected by the spread of the e‐economy, its networks, and the deconstruction of firms.     

Non‐Linear Relationships of Internal and External Resources on a Firm's Innovation: The Case of the Spanish Vinalopó Footwear Cluster

This paper aims to enrich the analysis on the significance of the individual firm resources in a cluster and the effects of diverse cluster relationships, including local and non‐local ones, on firms' innovation capacity. On questioning the commonly accepted direct and positive impact, we explore the joint and non‐linear effects of internal resources and inter‐organisational relationships on innovation. Data from 251 footwear manufacturers located in the Spanish Vinalopó cluster were used to explore the proposed causal relationships. According to findings, the impact of each factor on product innovation is not homogeneous. Internal innovation efforts and cooperation with local suppliers positively affect the creation of new products, while collaboration with local customers and extra‐cluster linkages presents an inverted U‐shaped relationship with product innovation. Finally, a number of implications may be drawn for policy makers, practitioners, and future research.     

A Comparison of Within-Firm and External Sources of Product Innovation

This paper examines the role of internal and external research, design and development (RD&D) activity in the innovation performance of New York State manufacturing firms in the scientific instruments sector. Survey data from a sample of 204 small and medium-sized companies suggest that the incidence of successful product development is higher among firms that combine in-house RD&D with technical support from independent specialists. Significantly, firms that supplement their in-house innovation efforts with outside talent are found to exhibit better commercial performance than their counterparts that operate on the basis of either internal or external technical resources alone. The paper concludes with a brief agenda for future empirical research on the conditions that support product innovation among small and medium-sized firms.     

Performance of High-Technology Firms in a Peripheral Resource-Based Economy: Alberta,Canada

In the 1980s high technology moved into the forefront in regional development throughout North America and Europe as a leading strategy. The attraction of high technology more recently spilled over into the province of Alberta, a peripheral region in western Canada whose government is seeking to diversify its resource-based economy. This paper focused upon the performance of high technology firms measured by financial growth, R&D activity, employment created, and marketing. Data were drawn from a 100 percent survey of all identifiable high-tech firms which constituted the first academic inquiry into Alberta's high-technology development. Research hypotheses relating gross revenues and net profit to independent firms and subsidiaries, gross revenues to age of firm, and R&D activity to independent firms and subsidiaries were tested. The results indicate that Alberta's high technology sector is composed mainly of small independent firms in the early stages of growth. Widely divergent revenue and profit trends were found among all firms while 41 percent of the respondents received government assistance to fund R&D programs. A young high-technology base is reflected further in the small size of the labor force although three out of four firms created jobs between 1980 and 1984. Marketing was a key area of performance identified by respondent firms as companies attempted to diversify away from local markets. Overall, the systematic policies of support by the Alberta government were found to assist the growth of the high-tech industry. Whether or not this growth will be sufficient to substantially diversify this resource-based economy in a peripheral Canadian region remains to be seen. Further research, particularly in the area of job creation, is necessary to assess the impact of high-technology firms over a longer period.     

The Role of Pre‐Entry Experience of Firm Founders in Peripheral Regions: Routines,Business Contacts,and Local Starting Conditions

This paper investigates how spinoffs in peripheral regions can profit from the work experience of their founders. More specifically, it discusses which firm routines and business contacts entrepreneurs gather through their prior work experience, and how this experience influences the organizational structure and orientation of the newly founded firm. The transfer of capabilities from parent firm to spinoff has been identified as important aspect of industrial clustering, but empirical evidence from peripheral areas is still sparse. It compares 22 semi‐structured interviews with founders of manufacturing firms from different peripheral regions in Switzerland to investigate whether routine and network transfer differs in varying peripheral contexts. The results show that not only inherited routines are important, but also inherited business contacts. Further, instead of simply reproducing acquired routines and networks, founders employ a mixture of continuity and change to find a good trade‐off between relying on well‐proven practices and introducing novelty. Finally, the geographical proximity of inherited business contacts seems to have an influence on the implementation strategy founders choose. Entrepreneurs with strong inherited local business contacts do not have to invest as much in building up new business contacts as those entrepreneurs in more isolated locations.