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A matching analysis of why some firms in peripheral regions undertake R&D whereas others do not

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  • Richard Harris
  • Mary Trainor

Abstract

Many studies have established the importance of investment in R&D to facilitate innovation and consequently improve firm productivity. Firms decide whether or not to undertake R&D depending on a range of factors such as market orientation, business objectives, competitive advantages and absorptive capacity. This paper studies the factors that influence this decision in peripheral locations; and for firms that do not undertake R&D, we analyse the reasons for not doing so. The research is based on data from a survey of some 250 matched firms operating in Northern Ireland, about half undertaking R&D and half not. Northern Ireland is an interesting case study because it exhibits a low level of investment in R&D despite the public subsidies and policy initiatives that have existed over the last 30 years. For firms that undertake R&D, our results mostly confirm the findings of others while for firms that do not undertake R&D the results point to a capabilities-gap rather than a resource-gap as the fundamental problem. Policy conclusions are drawn as to what might be done to boost both the amount of R&D undertaken and the number of firms engaged in R&D in peripheral regions.

Suggested Citation

  • Richard Harris & Mary Trainor, 2011. "A matching analysis of why some firms in peripheral regions undertake R&D whereas others do not," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(4), pages 367-385.
    • Handle: RePEc:taf:ecinnt:v:20:y:2011:i:4:p:367-385
    DOI: 10.1080/10438599.2010.494098
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    References listed on IDEAS

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    1. Dosi, Giovanni & Teece, David J. & Chytry, Josef (ed.), 1998. "Technology, Organization, and Competitiveness: Perspectives on Industrial and Corporate Change," OUP Catalogue, Oxford University Press, number 9780198290964, Decembrie.
    2. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, December.
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    Cited by:

    1. Bhattacharya, Mita & Okafor, Luke Emeka & Pradeep, V., 2021. "International firm activities, R&D, and productivity: Evidence from Indian manufacturing firms," Economic Modelling, Elsevier, vol. 97(C), pages 1-13.
    2. Bettina Becker, 2013. "The Determinants of R&D Investment: A Survey of the Empirical Research," Discussion Paper Series 2013_09, Department of Economics, Loughborough University, revised Sep 2013.
    3. Andrea Caragliu & Chiara F. Del Bo & Karima Kourtit & Peter Nijkamp, 2016. "The winner takes it all: forward-looking cities and urban innovation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(3), pages 617-645, May.
    4. Tran Thi Hue, 2019. "The determinants of innovation in Vietnamese manufacturing firms: an empirical analysis using a technology–organization–environment framework," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(3), pages 247-267, September.

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