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Spatial embeddedness and firm performance: an empirical exploration of the effects of proximity on innovative and economic performance

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  • Oerlemans, Leon A.G.

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  • Meeus, Marius T.H.

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    Abstract

    Recent theoretical developments in organisation science and regional economics have emphasised the importance of networks and geographical proximity for the performance of firms. Empirical evidence on these relationships is scarce, though, especially in regional science. In this paper, we address the following research question: to what extent do firm-specific resources, organisational embeddedness, proximity, and industry factors influence innovative and economic outcomes of innovative firms? We used a theoretical synthesis of regional and organisational science to build a research model that enabled us to derive several hypotheses on the influence of proximity on outcomes, taking other important predictors for performance into account. Our empirical findings confirm the importance of proximity especially for innovative outcomes. Moreover, we found that in particular network relations with buyers and suppliers are conducive for firm performance, whereas other indicators of embeddedness and of internal resources have little impact probably due to substitution effects. Finally, regional as well sectoral R&D spillovers influence outcomes in a positive way.

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    Bibliographic Info

    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa02p054.

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    Date of creation: Aug 2002
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    Handle: RePEc:wiw:wiwrsa:ersa02p054

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    1. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 99(397), pages 569-96, September.
    2. Oerlemans, L.A.G. & Meeus, M.T.H. & Boekema, F.W.M., 1998. "Do networks matter for innovation? The usefulness of the network approach in analysing innovation," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-78820, Tilburg University.
    3. Audretsch, David B, 1998. "Agglomeration and the Location of Innovative Activity," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 14(2), pages 18-29, Summer.
    4. Zvi Griliches, 1998. "The Search for R&D Spillovers," NBER Chapters, National Bureau of Economic Research, Inc, in: R&D and Productivity: The Econometric Evidence, pages 251-268 National Bureau of Economic Research, Inc.
    5. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 26(3), pages 1120-71, September.
    6. DeBresson, Chris & Amesse, Fernand, 1991. "Networks of innovators :A review and introduction to the issue," Research Policy, Elsevier, Elsevier, vol. 20(5), pages 363-379, October.
    7. Harabi, N., 1995. "Channels of R & D Spillovers: An Empirical Investigation," Papers, Universitat Zurich - Wirtschaftswissenschaftliches Institut 37, Universitat Zurich - Wirtschaftswissenschaftliches Institut.
    8. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, Elsevier, vol. 13(6), pages 343-373, December.
    9. Leon A.G. Oerlemans & Marius T.H. Meeus & Frans W.M. Boekema, 1998. "Do Networks Matter for Innovation? The usefulness of the economic network approach in analysing innovation," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, Royal Dutch Geographical Society KNAG, vol. 89(3), pages 298-309, 08.
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    12. Love, James H. & Roper, Stephen, 2001. "Location and network effects on innovation success: evidence for UK, German and Irish manufacturing plants," Research Policy, Elsevier, Elsevier, vol. 30(4), pages 643-661, April.
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    14. Bart Verspagen & Marjolein C.J. Cani, ls, 2001. "Barriers to knowledge spillovers and regional convergence in an evolutionary model," Journal of Evolutionary Economics, Springer, Springer, vol. 11(3), pages 307-329.
    15. Roberta Capello, 1999. "Spatial Transfer of Knowledge in High Technology Milieux: Learning Versus Collective Learning Processes," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 33(4), pages 353-365.
    16. �sa Lindholm Dahlstrand, 1999. "Technology-based SMEs in the Go �teborg Region: Their Origin and Interaction with Universities and Large Firms," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 33(4), pages 379-389.
    17. Keith Smith, . "Interactions in knowledge systems: Foundations, policy implications and empirical methods," STEP Report series, The STEP Group, Studies in technology, innovation and economic policy 199410, The STEP Group, Studies in technology, innovation and economic policy.
    18. Wilbur R. Thompson, 1962. "Locational Differences in Inventive Effort and Their Determinants," NBER Chapters, National Bureau of Economic Research, Inc, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 253-272 National Bureau of Economic Research, Inc.
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    Cited by:
    1. Werner Bönte, 2003. "Innovation and Employment Growth in Industrial Clusters: Evidence from Aeronautical Firms in Germany," ERSA conference papers, European Regional Science Association ersa03p284, European Regional Science Association.

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