Innovation performance and embeddedness in networks: evidence from the Ethiopian footwear cluster

Mulu Gebreeyesus and Pierre Mohnen

No 2011-043, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This study focuses on innovation in a cluster of informal shoemaking firms in Ethiopia - namely the Mercato footwear cluster. It examines how differently those firms are embedded in networks and how heterogeneous they are in absorptive capacity, and how this heterogeneity affects their innovation performance. Business interactions with buyers, suppliers and other producers are the major channels through which knowledge flows into the cluster. These business networks are mainly built on trust and long-term relationships and tend to be selective. The study reveals that despite homogeneity in social background the firms in the cluster behave and perform differently. Based on econometric analysis we document a positive and strong effect of local network position and absorptive capacity on innovation performance.

Keywords: industrial clusters; networks; innovation performance; informal sector; Africa; Ethiopia (search for similar items in EconPapers)
JEL-codes: O17 O31 O33 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Innovation Performance and Embeddedness in Networks: Evidence from the Ethiopian Footwear Cluster (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2011043

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