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.     

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.     

Research and development intensive clusters and regional competitiveness

Modern cluster theory provides reasons for positive external effects that accrue from the interaction of spatially proximate firms operating in common and related fields of economic activity. In this paper, we examine the impact of R&D-intensive clusters as a key factor of regional competitiveness on productivity growth. In relying on a hybrid approach of cluster identification, we examine effects of cluster specialization and diversity for a panel of German NUTS-3 regions in 2003–2019. After controlling for regional characteristics and unobserved heterogeneity, a robust cluster strength effect (i.e., specialization) on productivity growth is found within the context of conditional convergence across German regions. With regard to the underlying mechanisms, we find that the presence of multiple R&D-intensive clusters in specific technological fields is most strongly linked to higher levels of regional productivity growth. We also find that advantages from cluster specialization are strongest in key industrial sector such as automobile production, machinery, chemical and pharmaceutical products. Overall, our estimates particularly highlight the working of Marshallian externalities in productivity dynamics, while Jacobs-type spillovers tend to be partially realized. These findings indicate that some but not all cluster-based regional development strategies are promising policy tools to foster regional growth processes.     

Do Geographic Concentration and Vertically Related Variety Foster Firm Productivity? Micro‐Evidence from Italy

Using a large unbalanced panel dataset of more than 12,000 Italian manufacturing firms for the period 1999–2007, this paper investigates the role of geographic concentration and related variety on firms' total factor productivity (TFP). The main idea is that diversification—captured by a measure of vertically related variety—promotes firm innovativeness and, consequently, productivity, but when the technology has been consolidated, firms join specialized clusters that enhance efficiency. Our results suggest that the effect on firms' TFP of geographic concentration is stronger than that of related variety. We also confirm previous findings on the relevance of agglomeration forces for small firms compared with medium and large firms, where these agglomerative forces do not seem to influence TFP.     

Spatial Agglomeration,Technological Innovations,and Firm Productivity: Evidence from Italian Industrial Districts

ABSTRACT The aim of this paper is to analyse the impact on firms' productivity of innovative activities and agglomeration effects among firms belonging to Marshallian industrial districts and the possible joint effect of these two forces. We study a sample of 2,821 firms active in the Italian manufacturing industry in the period 1992–1995. Our analysis uses an original data set based on three different Istituto Nazionale di Statistica statistical sources—Community Innovation Survey, Archivio Statistico delle Imprese Attive (Italian Business Register), and Sistema dei Conti delle Imprese (Italian Structural Business Statistics)—to estimate an “augmented” Cobb‐Douglas production function to account for the impact of technological innovations and district‐specific agglomeration effects on a firm's productivity growth. Our data set allows us to distinguish between product and process innovations, thus, through econometric analysis, we hope to achieve a better understanding of which of these two types of innovative activities benefits most from participation in an industrial district. Our empirical results show that belonging to an industrial district and making product innovations are key factors in the productivity growth of firms and that product innovations appear to have a greater effect on the economic performance of district rather than non‐district firms.     

Some Micro‐Evidence on the “Porter Hypothesis” from Austrian VOC Emission Standards

This paper presents some micro‐evidence relevant to the “Porter Hypothesis” on the techno‐economic consequences of Austrian Volatile Organic Compound (VOC) emission standards, the most restrictive of their kind in the world. Using firm‐level survey data and complementing it with highly disaggregated foreign trade data, the paper explores whether the standards had a palpable impact on the competitiveness of Austrian manufacturers of paints, coatings, printing inks, and adhesives, whether compliance stimulated innovation in this industry, whether the standards crowded out other, more productive Research and Development (R&D), and whether compliance efforts gave rise to unexpected benefits of compliance. It finds no unequivocal aggregate impact on the competitiveness of regulated firms, yet does find some interesting variation with firm size. Moreover, the standards appear to have dampened import competition. The standards gave rise to considerable changes in firms’ product range and appear to have accelerated the rate of product innovation in the regulated industry. R&D spending to develop compliant products is found to be very unevenly distributed, mainly due to technological and, to a lesser extent, organizational factors. There is evidence that compliance efforts displaced or postponed existing R&D projects. However, there is also evidence that search for compliant products yielded unexpected and beneficial ideas, knowledge, and competencies.     

Efficiency of Embodied Technology Spillovers

Technological progress is the key competitive ability of a society.A society's technological progress depends on it's ability of research and development (R&D) and the absorption of R&D spillovers. Since China is a developing country, which is comparatively short of R&D expenditure and activity, it is absolutely necessarily to utilize R&D spillovers. This paper analyses the relation among destination-specific AC (Absorption Capacity) , source- and destination-specific SS (Structural Similarity) and embodied technology spillovers by one-sector and three-areas GTAP models. The conclusion is:Being 'neutral' in nature, the exogenous Hicks-Neutral Technical Progress shock uniformly reduces the input requirements associated with producing a given level of output of stuff.     

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.     

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.     

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.     

The heterogeneity of agglomeration effect: Evidence from Chinese cities

Using annual surveys of industrial firms in China from 1998 to 2007, this paper applies the non‐linear least squares (NLS) method based on a grid search to analyse the effect of city size on firm total factor productivity (TFP). The results show that overall, the agglomeration effects in large cities, but not selection effects, significantly promote improvement in firm TFP. The optimal agglomeration scales of different industries differ as follows: those of capital‐ and technology‐intensive industries are larger than those of labour‐intensive industries. The agglomeration effects are also robust to different spatial areas without considering administrative boundaries. An inverted U‐shaped relationship exists between firm size and agglomeration effects, while the relationship between firm age and agglomeration effects is U‐shaped. State‐owned firms experience weaker agglomeration effects than non‐state‐owned firms. Cities higher in the administrative hierarchy and those with special economic zones have stronger agglomeration effects. However, cities higher in the administrative hierarchy and those with a larger economic development zone index can provide more resources to increase the survival rate of low‐productivity firms; thus, selection effects are not significant in Chinese cities.     

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.     

Networking policy and firm performance

This paper evaluates the effects of inter-firm networks (IFNs) on firms’ economic performance. This policy instrument has been implemented in Italy from 2009 to support mostly small and medium-size enterprises after the great economic crisis of 2007–2009. Starting from an original database of Italian manufacturing and service firms for the period 2010–2017, the paper develops in two steps: the first part, with “difference-in-differences” technique, is highlighted the positive effect on firms’ performance for those firms involved in an IFN. The second part investigates which characteristics of the IFN have better impacts on firm’s performance in the medium long-run. This study contributes to the network policy literature by revealing another instrument to foster cooperation and increase firms’ innovation and internationalisation, without the need to be geographically bounded.     

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.     

New Firm Formation and Industry Clusters: A Case of the Drugs Industry in the U.S.

The importance of new firms in regional growth led many scholars to probe the determinants of new firm formation. A close examination of cluster theory predicts that industry clusters can enhance new firm births as well as the productivity of existing firms. Linkages among firms and related institutions, which are the key characteritics of the cluster phenomenon, can serve as an important determinant of new firm formation. The network aspect of clusters helps nascent entrepreneurs find resources and information easier and faster than in an isolated environment. In addition, nascent entrepreneurs in industry clusters often have rich experience in existing local firms, which becomes important prior knowledge to explore new market opportunities. This study examines the effects of clusters on new firm formation. We found that the cluster based on knowledge sharing (i.e., knowledge–labor cluster) significantly affects the new firm formation process, whereas the cluster based on market transactions (i.e., value‐chain cluster) does not seem to play a role in new firm formation.     

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.     

Innovation Expectations and Patenting in Private and Public R&D Projects

In this paper, we investigate how the innovation expectations of public financiers are related to realized patents. The analysis is based on a novel data set of collaborative R&D projects subsidized by the Finnish Agency of Technology and Innovation (Tekes) and the European Regional Development Fund (ERDF) during the period 2000–2004. Innovation expectations are measured using reports submitted by Tekes experts during ex ante assessments of projects. Our probit model results reveal that Tekes' patent expectations are positively related to realized patents for projects led by private firms (but not by public organizations). For large organizations, Tekes' innovation expectations are better at predicting patenting.     

Firm Demography and Regional Development: Evidence from Italy

This article contributes to the literature on firm demography and regional development in at least three different ways. First, consumption, rather than employment, which is the most common variable seen in literature, is used to measure the impact of firm demography on regional development. Second, while the literature is mainly focused on the relationship between new business formation and regional development, we investigate both entry and exit flows of firms. Third, we decompose each of these flows into spatial and sectoral components. The empirical investigation looks at the Italian regions with reference to the period 2004–2009. Results seem to be substantially divergent between the South and the rest of Italy.     

Agglomeration and firm performance in times of economic turmoil: Evidence from Tunisian firm-level data

The paper analyzes the relationship between agglomeration economies (urbanization, specialization, and diversity) and firm-level performance during a period of deep economic downturn (2011–2018). We use data from the National Survey of Economic Activities for eight Tunisian manufacturing industries to explore which agglomeration externalities matter most for firm performance after the revolution. The analysis considers, in addition, the role played by selected firm-specific characteristics. The empirical results, based on a multilevel analysis approach, sanction the importance of firm-specific determinants of productivity and exporting. They also indicate that only specialization externalities have a positive and significant effect on firms' performance. The replicate results during a period of economic stability (1998–2004) show, however, that specialization and urbanization economies are both relevant predictors of firms' productivity and that more productive firms, in particular the smaller ones, are better able to benefit from agglomeration. This finding has not been confirmed for the post-revolutionary period.