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Understanding absorptive capacities in an "innovation systems" context consequences for economic and employment growth

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  • Rajneesh Narula

Abstract

This paper seeks to broaden our understanding of the concept underlying absorptive capacity at the macro –level, paying particular attention to the growth and development perspectives. We provide definitions of absorptive and technological capacity, external technology flows, productivity growth, employment creation and their interrelations. We then analyse the elements of absorptive capability, focusing on the nature of the relationship within a systems view of an economy, focusing primarily on the role of firm and non-firm actors and the institutions that connect them, both within and across borders. We also undertake to explain how the nature of absorptive capacity changes with stages of economic development, and the importance of the different aspects of absorptive capability at different stages. The relationship is not a linear one: the benefits that accrue from marginal increases in absorptive capability change over time. Finally, we provide a tentative and preliminary conceptual argument of how the different stages of absorptive capacity are related to productivity growth, economic growth and employment creation.

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Bibliographic Info

Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 04-02.

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Date of creation: 2004
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Handle: RePEc:aal:abbswp:04-02

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Web page: http://www.druid.dk/

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Keywords: New economy; absorptive capacity; knowledge;

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References

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  1. Etzkowitz, Henry & Leydesdorff, Loet, 2000. "The dynamics of innovation: from National Systems and "Mode 2" to a Triple Helix of university-industry-government relations," Research Policy, Elsevier, vol. 29(2), pages 109-123, February.
  2. Hagedoorn ,John & Narula ,Rajneesh, 1995. "Evolutionary understanding of corporate foreign investment behaviour : US foreign direct investment in Europe," Research Memorandum 001, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  3. Fagerberg, Jan, 1994. "Technology and International Differences in Growth Rates," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1147-75, September.
  4. Narula,Rajneesh & Criscuolo,Paola, 2002. "A novel approach to national technological accumulation and absorptive capacity: Aggregating Cohen and Levinthal," Research Memorandum 018, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  5. Ethan B. Kapstein, 2002. "Virtuous Circles? Human Capital Formation, Economic Development and the Multinational Enterprise," OECD Development Centre Working Papers 191, OECD Publishing.
  6. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September.
  7. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 385-406, June.
  8. Glass, Amy Jocelyn & Saggi, Kamal, 1998. "International technology transfer and the technology gap," Journal of Development Economics, Elsevier, vol. 55(2), pages 369-398, April.
  9. Findlay, Ronald, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 1-16, February.
  10. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February.
  11. Katrak, Homi, 2002. "Does economic liberalisation endanger indigenous technological developments?: An analysis of the Indian experience," Research Policy, Elsevier, vol. 31(1), pages 19-30, January.
  12. Anthony Arundel & Aldo Geuna, 2001. "Does Proximity Matter for Knowledge Transfer from Public Institutes and Universities to Firms?," SPRU Working Paper Series 73, SPRU - Science and Technology Policy Research, University of Sussex.
  13. Narula,Rajneesh & Criscuolo,Paola, 2002. "A novel approach to national technological accumulation and absorptive capacity: Aggregating Cohen and Levinthal," Research Memorandum 018, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
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Citations

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Cited by:
  1. Cimoli, Mario & Porcile, Gabriel & Primi, Annalisa & Vergara, Sebastián & Brito, Marcio Holland de, 2010. "Growth, structural change and technological capabilities Latin America in a comparative perspective," Textos para discussão 212, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
  2. Santangelo, Grazia D., 2009. "MNCs and linkages creation: Evidence from a peripheral area," Journal of World Business, Elsevier, vol. 44(2), pages 192-205, April.
  3. Cimoli, Mario & Pereira, Wellington & Porcile, Gabriel & Scatolin, Fabio, 2008. "Structural Change, Technology, and Economic Growth: Brazil and the CIBS in a Comparative Perspective," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Cimoli, Mario & Porcile, Gabriel, 2011. "Technology, structural change and BOP constrained growth: A structuralist toolbox," MPRA Paper 33800, University Library of Munich, Germany.
  5. Tobias Schmidt, 2010. "Absorptive capacity-one size fits all? A firm-level analysis of absorptive capacity for different kinds of knowledge," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(1), pages 1-18.
  6. Narula ,Rajneesh, 2005. "Globalisation, EU expansion and consequences for MNE location," Research Memorandum 003, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  7. Mario Cimoli & Wellington Pereira & Gabriel Porcile & Fábio Scatolin, 2011. "Structural change, technology, and economic growth: Brazil and the CIBS in a comparative perspective," Economic Change and Restructuring, Springer, vol. 44(1), pages 25-47, April.
  8. Shafiei, Ehsan & Saboohi, Yadollah & Ghofrani, Mohammad B., 2009. "Optimal policy of energy innovation in developing countries: Development of solar PV in Iran," Energy Policy, Elsevier, vol. 37(3), pages 1116-1127, March.
  9. Andrew MOLD, 2004. "Fdi And Poverty Reduction: A Critical Reappraisal Of The Arguments," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 20, pages 91-122.
  10. Mario Cimoli & Gabriel Porcile, 2011. "Tecnología, heterogeneidad y crecimiento: un caja de herramientas estructuralista," Working Papers 0119, Universidade Federal do Paraná, Department of Economics.
  11. Narula ,Rajneesh & Marin ,Anabel, 2005. "Exploring the relationship between direct and indirect spillovers from FDI in Argentina," Research Memorandum 024, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  12. Lall, Sanjaya & Narula,Rajneesh, 2004. "FDI and its role in economic development: Do we need a new agenda?," Research Memorandum 019, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  13. Ahmed, Elsadig Musa, 2012. "Are the FDI inflow spillover effects on Malaysia's economic growth input driven?," Economic Modelling, Elsevier, vol. 29(4), pages 1498-1504.

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