Regions Matter How Regional Characteristics Affect External Knowledge Acquisition and Innovation

Keld Laursen (), Francesca Masciarelli and Andrea Prencipe

No 07-20, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: To introduce new products and processes, firms often acquire knowledge from other organizations. Drawing on social capital and transaction cost theory, we argue that not only is the impact of such acquisitions on the successful development of product and product innovations dependent on strategic and economic variables, it may also be contingent on the “knowledge characteristics” of the geographical area in which the firm is located. Combining data on social capital at the level of 21 regions with a large scale data set on innovative activities by a representative sample of 2464 Italian manufacturing firms, we find — after controlling for a large set of firm and regional characteristics — that being located in regions characterized by high levels of social interaction leads to a higher propensity to innovate. In addition, being located in an area characterized by a high degree of social interaction positively moderates the effectiveness of externally acquired R&D on innovation inclination.

Keywords: Social capital; external acquisition; process innovation; product innovation (search for similar items in EconPapers)
JEL-codes: L23 O31 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-cse, nep-geo, nep-ino, nep-knm, nep-pke and nep-soc
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