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The Impact of Face-to-face and Frequent Interactions on Innovation: Evidence from Upstream-Downstream Relations

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  • Tomohiro Machikita

    ()
    (Institute of Developing Economies, Inter-disciplinary Studies Center Japan External Trade Organization (IDE-JETRO), Japan)

  • Yasushi Ueki

    ()
    (Institute of Developing Economies, Bangkok Research Center Japan External Trade Organization Thailand)

Abstract

This paper proposes a new mechanism linking innovation and networks in developing economies to identify explicit production and information linkages. We investigate the testable hypotheses of these linkages using survey data gathered from manufacturing firms in East Asia: Indonesia, Thailand, the Philippines, and Vietnam. We found that firms that dispatched engineers to customers achieved more product and process innovations than firms that did not. Just-in-time relationship is effective for dealing with process innovation. We found that such strong complementarities as Just-in-time are not effective for product innovation. These findings support the hypothesis that face-to-face communication and strong complementarities among buyer-seller networks have different roles in product and process innovation.

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Bibliographic Info

Article provided by Faculty of Economics and Administration, University of Malaya in its journal Institutions and Economies (formerly known as International Journal of Institutions and Economies).

Volume (Year): 3 (2011)
Issue (Month): 3 (October)
Pages: 519-548

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Handle: RePEc:umk:journl:v:3:y:2011:i:3:p:519-548

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Related research

Keywords: - exchanges of engineer; innovation; insider econometrics; just-in-time; status quo;

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  1. Marcus Berliant & Masahisa Fujita, 2009. "Dynamics of knowledge creation and transfer: The two person case," International Journal of Economic Theory, The International Society for Economic Theory, vol. 5(2), pages 155-179.
  2. Marcus Berliant & Masahisa Fujita, 2004. "Knowledge Creation as a Square Dance on the Hilbert Cube," Game Theory and Information 0401004, EconWPA, revised 27 Jan 2004.
  3. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-52, December.
    • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
  4. Tomohiro MACHIKITA & Yasushi UEKI, 2010. "Innovation in Linked and Non-linked Firms: Effects of Variety of Linkages in East Asia," Working Papers DP-2010-03, Economic Research Institute for ASEAN and East Asia (ERIA).
  5. Vega-Jurado, Jaider & Gutiérrez-Gracia, Antonio & Fernández-de-Lucio, Ignacio & Manjarrés-Henri­quez, Liney, 2008. "The effect of external and internal factors on firms' product innovation," Research Policy, Elsevier, vol. 37(4), pages 616-632, May.
  6. Keely,L.C., 2002. "Exchanging good ideas," Working papers 14, Wisconsin Madison - Social Systems.
  7. Rasiah, Rajah, 1994. "Flexible Production Systems and Local Machine-Tool Subcontracting: Electronics Components Transnationals in Malaysia," Cambridge Journal of Economics, Oxford University Press, vol. 18(3), pages 279-98, June.
  8. Blalock, Garrick & Gertler, Paul J., 2008. "Welfare gains from Foreign Direct Investment through technology transfer to local suppliers," Journal of International Economics, Elsevier, vol. 74(2), pages 402-421, March.
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