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Local knowledge spillovers, innovation and export performance in developing countries: empirical evidence from the Uruguay software cluster

Effie Kesidou () and Adam Szirmai

The European Journal of Development Research, 2008, vol. 20, issue 2, 281-298

Abstract: This paper examines the importance of local knowledge spillovers for the innovative and export performance of firms in a developing country context. Theoretical and empirical studies in advanced economies underline the significance of local knowledge spillovers for innovation. However, not much is known about whether local knowledge spillovers work similarly in developing countries. This analysis is based on an original innovation survey in the software industry in Uruguay. The survey focuses on the direct identification and measurement of local knowledge spillovers; pure knowledge spillovers are distinguished from commercial knowledge transactions. Both knowledge spillovers and knowledge transactions are measured at the local and at the international level. The study concludes that local knowledge spillovers play a crucial role in enhancing the innovative performance of software firms in Uruguay. However, for the export performance of the firms, international knowledge transactions turn out to be more important than local knowledge spillovers. Local knowledge spillovers may be essential for innovation, but not sufficient for economic success. Firms in developing countries need to be connected to both the local and the international economy. Cet article s'interesse a l'importance des transferts de connaissance au niveau local au regard des performances en matiere d'innovation et a l'exportation des entreprises, dans le cas d'un pays en developpement. Des etudes theoriques et empiriques dans les pays developpes soulignent l'importance des transferts de connaissances au niveau local en ce qui concerne l'innovation. Cependant, il est difficile de dire si ces retombees operent de facon similaire dans les pays en developpement. Cette analyse est basee sur une enquete originale portant sur l'innovation dans l'industrie du logiciel en Uruguay. L'enquete porte plus particulierement sur l'identification et la mesure des transferts locaux de connaissance. Cette etude conclut que ces retombees jouent un role determinant dans le renforcement de la performance en matiere d'innovation des entreprises produisant des logiciels en Uruguay. Cependant, a propos de la performance a l'exportation des entreprises, les transferts internationaux de connaissances deviennent plus importants que les transferts de connaissances au niveau local. Ces derniers sont probablement essentiels pour l'innovation mais insuffisants pour le succes economique. Les entreprises des pays en developpement doivent etre en lien tant avec l'economie locale que l'economie internationale.

Keywords: local knowledge spillovers; innovation; export performance; developing economies (search for similar items in EconPapers)
Date: 2008
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DOI: 10.1080/09578810802060769

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The European Journal of Development Research is currently edited by Rajneesh Narula

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