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Social Capital, R&D and Industrial Districts

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  • Massimiliano Mazzanti

    (University of Ferrara)

  • Giulio Cainelli

    (University of Bari and CERIS-CNR)

  • Susanna Mancinelli

    (University of Ferrara)

Abstract

The main idea behind this paper is that social capital is not, as generally suggested by the socio-economic literature, an individual attitude towards something which does not imply privately appropriable economic benefits. Actually, SC might and should be interpreted as a public component of an investment which implies private and public benefits entangled with each other. In order to put forward this idea, a dynamic theoretical model that assumes social capital as the public component of the impure public good R&D is developed. It shows that the ‘civic culture’ of the district area in which the firm works is not sufficient as an incentive to increase its investment in social capital, because this investment strictly depends on the economic convenience of investing in the impure public good. Social capital /networking dynamics might positively and complementarily evolve only if the opportunity cost of investing in innovation is sufficiently low. We consequently focus our attention on a specialized industrial district located in the Emilia Romagna region – the biomedical district of Mirandola (Modena) – characterised by a strong pattern of innovative activity. Using a proxy for innovative activity as dependant variable, we observe that R&D and networking/social capital arise as complementary driving forces for innovation outputs. When empirical evidence confirms that this complementarity plays a key role, and consequently strong links exist between market and non-market dynamics relating to firms, the role for policy actions targeted to social capital is larger. The policy effort should be targeted toward both market and non-market characteristics taken together, rather than solely to the production of (local) public goods (social capital) or innovation inputs as independent elements of firm processes. The input of SC alone is not sufficient to ensure innovation and growth: economic incentives matter. On the other hand, whenever SC dynamics are crucial for R&D private investments, the effect of economic incentives depends on the presence and degree of their complementarity.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2005.84.

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Date of creation: Jun 2005
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Handle: RePEc:fem:femwpa:2005.84

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Keywords: Social capital; R&D; Technological innovation; Industrial districts;

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References

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  1. Wolfgang Becker & Juergen Dietz, 2002. "R&D Cooperation and Innovation Activities of Firms - Evidence for the German Manufacturing Industry -," Discussion Paper Series 222, Universitaet Augsburg, Institute for Economics.
  2. Durlauf,S.N., 2001. "On the empirics of social capital," Working papers 3, Wisconsin Madison - Social Systems.
  3. Christine Oughton & Geoff Whittam., . "Competition and Co-operation in the Small Firm Sector," Working Papers 9602, Business School - Economics, University of Glasgow.
  4. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
  5. Yannis Caloghirou & Stavros Ioannides & Nicholas S. Vonortas, 2003. "Research Joint Ventures," Journal of Economic Surveys, Wiley Blackwell, vol. 17(4), pages 541-570, 09.
  6. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2000. "The Role of Social Capital In Financial Development," CEPR Discussion Papers 2383, C.E.P.R. Discussion Papers.
  7. Nyberg, Sten, 1997. "The honest society: Stability and policy considerations," Journal of Public Economics, Elsevier, vol. 64(1), pages 83-99, April.
  8. Fritsch, Michael & Franke, Grit, 2004. "Innovation, regional knowledge spillovers and R&D cooperation," Research Policy, Elsevier, vol. 33(2), pages 245-255, March.
  9. Negassi, S., 2004. "R&D co-operation and innovation a microeconometric study on French firms," Research Policy, Elsevier, vol. 33(3), pages 365-384, April.
  10. Milgrom, Paul & Roberts, John, 1995. "Complementarities and fit strategy, structure, and organizational change in manufacturing," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 179-208, April.
  11. Bruno Cassiman & Reinhilde Veugelers, 2002. "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium," American Economic Review, American Economic Association, vol. 92(4), pages 1169-1184, September.
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Cited by:
  1. Riccardo Crescenzi & Luisa Gagliardi & Marco Percoco, 2013. "Social capital and the innovative performance of Italian provinces," LSE Research Online Documents on Economics 46414, London School of Economics and Political Science, LSE Library.
  2. Massimiliano Mazzanti & Roberto Zoboli, 2006. "Examining the Factors Influencing Environmental Innovations," Working Papers 2006.20, Fondazione Eni Enrico Mattei.

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