SMEs’ Absorptive Capacities and Large Firms’ Knowledge Spillovers: Micro Evidence from the Machining Industry in Mexico
AbstractThe aim of this paper is to analyse the relationship between large firms’ knowledge spillovers and small and medium enterprises’ absorptive capacities. We build ad hoc indicators for these two concepts following a factor analysis methodology, and carry out a structural equations analysis to determine the relationship between them. Based on firm level data from a survey that focuses on SMEs of the machining industry in a Mexican locality, this paper argues that in a low-tech and mature sector, which operates in a loosely articulated local system, two knowledge spillover mechanisms are relevant – the backward linkages and the employees’ mobility. SMEs’ absorptive capacities are strongly influenced by organisational capabilities and innovation and learning activities. We also argue that large firms’ knowledge spillovers are strongly correlated with SMEs’ absorptive capacities within the sector and locality analysed.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle 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): 5 (2013)
Issue (Month): 1 (April)
diffusion processes; economic development; entrepreneurship; knowledge; Latin America; machinery; models; regional economic activity; SME; technological change;
Find related papers by JEL classification:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fosfuri, Andrea & Motta, Massimo & Ronde, Thomas, 2001.
"Foreign direct investment and spillovers through workers' mobility,"
Journal of International Economics,
Elsevier, vol. 53(1), pages 205-222, February.
- Fosfuri, Andrea & Motta, Massimo & Rønde, Thomas, 1999. "Foreign Direct Investment and Spillovers through Workers' Mobility," CEPR Discussion Papers 2194, C.E.P.R. Discussion Papers.
- Andrea Fosfuri & Massimo Motta & Thomas Ronde, 1998. "Foreign direct investments and spillovers through workers' mobility," Economics Working Papers 258, Department of Economics and Business, Universitat Pompeu Fabra.
- Smarzynska, Beata K., 2002.
"Does foreign direct investment increase the productivity of domestic firms : in search of spillovers through backward linkages,"
Policy Research Working Paper Series
2923, The World Bank.
- Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
- Beata K. Smarzynska, 2003. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers through Backward Linkages," William Davidson Institute Working Papers Series 548, William Davidson Institute at the University of Michigan.
- Sjöholm, Fredrik, 1997.
"Technology Gap, Competition and Spillovers from Direct Foreign Investment: Evidence from Establishment Data,"
Working Paper Series in Economics and Finance
212, Stockholm School of Economics.
- Fredrik Sjoholm, 1999. "Technology gap, competition and spillovers from direct foreign investment: Evidence from establishment data," Journal of Development Studies, Taylor & Francis Journals, vol. 36(1), pages 53-73.
- 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.
- Rasiah, Rajah, 2002. "Systemic Coordination and Human Capital Development: Knowledge Flows in Malaysia's MNC-Driven Electronics Clusters," UNU-INTECH Discussion Paper Series 07, United Nations University - INTECH.
- Nelson, Andrew J., 2009. "Measuring knowledge spillovers: What patents, licenses and publications reveal about innovation diffusion," Research Policy, Elsevier, vol. 38(6), pages 994-1005, July.
- Girma, Sourafel & Greenaway, David & Wakelin, Katharine, 2001.
"Who Benefits from Foreign Direct Investment in the UK?,"
Scottish Journal of Political Economy,
Scottish Economic Society, vol. 48(2), pages 119-33, May.
- Sourafel Girma & David Greenaway & Katharine Wakelin, 2013. "Who Benefits from Foreign Direct Investment in the UK?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(5), pages 560-574, November.
- Escribano, Alvaro & Fosfuri, Andrea & Tribó, Josep A., 2009. "Managing external knowledge flows: The moderating role of absorptive capacity," Research Policy, Elsevier, vol. 38(1), pages 96-105, February.
- Manuel Albaladejo, . "Determinants and Policies to Foster the Competitiveness of SME Clusters: Evidence from Latin America," QEH Working Papers qehwps71, Queen Elizabeth House, University of Oxford.
- Maurice Kugler, .
"Spillovers from Foreign Direct Investment: Within or between Industries?,"
Borradores de Economia
369, Banco de la Republica de Colombia.
- Kugler, Maurice, 2006. "Spillovers from foreign direct investment: Within or between industries?," Journal of Development Economics, Elsevier, vol. 80(2), pages 444-477, August.
- Maurice Kugler, 2006. "Spillovers From Foreign Direct Investment:Within Or Between Industries?," BORRADORES DE ECONOMIA 003523, BANCO DE LA REPÚBLICA.
- Jordaan, Jacob A., 2005. "Determinants of FDI-induced externalities: New empirical evidence for Mexican manufacturing industries," World Development, Elsevier, vol. 33(12), pages 2103-2118, December.
- Liu, Xiaohui & Buck, Trevor, 2007. "Innovation performance and channels for international technology spillovers: Evidence from Chinese high-tech industries," Research Policy, Elsevier, vol. 36(3), pages 355-366, April.
- Wilbur Chung & W Mitchell & B Yeung, 2003. "Foreign direct investment and host country productivity: the American automotive component industry in the 1980s," Journal of International Business Studies, Palgrave Macmillan, vol. 34(2), pages 199-218, March.
- Davide Castellani & Antonello Zanfei, 2003. "Technology gaps, absorptive capacity and the impact of inward investments on productivity of European firms ," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(6), pages 555-576.
- Wilbur Chung, 2001. "Identifying Technology Transfer in Foreign Direct Investment: Influence of Industry Conditions and Investing Firm Motives," Journal of International Business Studies, Palgrave Macmillan, vol. 32(2), pages 211-229, June.
- Kafouros, Mario I. & Buckley, Peter J., 2008. "Under what conditions do firms benefit from the research efforts of other organizations?," Research Policy, Elsevier, vol. 37(2), pages 225-239, March.
- Lall, Sanjaya, 1980. "Vertical Inter-Firm Linkages in LDCs: An Empirical Study," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 42(3), pages 203-26, August.
- Daniel Chudnovsky & Andres Lopez & Gaston Rossi, 2004.
"Foreign Direct Investment Spillovers and the Absorption Capabilities of Domestic Firms in the Argentine Manufacturing Sector (1992-2001),"
74, Universidad de San Andres, Departamento de Economia, revised Jul 2004.
- Daniel Chudnovsky & Andres Lopez & Gaston Rossi, 2008. "Foreign Direct Investment Spillovers and the Absorptive Capabilities of Domestic Firms in the Argentine Manufacturing Sector (1992-2001)," Journal of Development Studies, Taylor & Francis Journals, vol. 44(5), pages 645-677.
- Motohashi, Kazuyuki & Yuan, Yuan, 2010. "Productivity impact of technology spillover from multinationals to local firms: Comparing China's automobile and electronics industries," Research Policy, Elsevier, vol. 39(6), pages 790-798, July.
- Anabel Marin & Martin Bell, 2006. "Technology spillovers from Foreign Direct Investment (FDI): the active role of MNC subsidiaries in Argentina in the 1990s," Journal of Development Studies, Taylor & Francis Journals, vol. 42(4), pages 678-697.
- Durham, J.B.J. Benson, 2004. "Absorptive capacity and the effects of foreign direct investment and equity foreign portfolio investment on economic growth," European Economic Review, Elsevier, vol. 48(2), pages 285-306, April.
- Blalock, Garrick & Gertler, Paul J., 2004. "Learning from exporting revisited in a less developed setting," Journal of Development Economics, Elsevier, vol. 75(2), pages 397-416, December.
- Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998.
"How does foreign direct investment affect economic growth?1,"
Journal of International Economics,
Elsevier, vol. 45(1), pages 115-135, June.
- Eduardo Borensztein & Jose De Gregorio & Jong-Wha Lee, 1995. "How Does Foreign Direct Investment Affect Economic Growth?," NBER Working Papers 5057, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Professor Dr. Rajah Rasiah).
If references are entirely missing, you can add them using this form.