Do firms in clusters invest in R&D more intensively? Theory and evidence from multi-country data
This study aims to evaluate whether firms located in clusters invest more intensively in research and development (R&D) than their non-clustered counterparts. Specifically, it proposes a model of firm R&D and tests empirically its implications for the effect of being located in a cluster on firm R&D intensity. The key ideas underlying the theory are as follows: (1) due either to natural excludability or to a high degree of stickiness of R&D-opportunity-bearing technological knowledge, geographical proximity per se is limited in the (automatic) spillover of knowledge with promising R&D opportunities to nearby firms; (2) geographical proximity may, however, help enhance the effectiveness or efficiency of knowledge exchange through market mechanisms (e.g., through contract R&D, R&D collaboration); (3) potential advantages (or disadvantages) in firm R&D of being located in a cluster also depend on the degree of asymmetry in technological competence among firms located in the cluster. The key ideas are supported by an empirical analysis of a multi-industry, multi-country data set compiled by the World Bank. In particular, the results show that being located in a cluster per se actually has a negative effect on firm R&D intensity, which is in contrast to the conventional wisdom of pure or automatic localized knowledge spillovers, as far as firm R&D intensity is concerned.
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.:
- James D. Adams & Adam B. Jaffe, 1996.
"Bounding the Effects of R&D: An Investigation Using Matched Establishment-Firm Data,"
RAND Journal of Economics,
The RAND Corporation, vol. 27(4), pages 700-721, Winter.
- James D. Adams & Adam B. Jaffe, 1996. "Bounding the Effects of R&D: An Investigation Using Matched Establishment-Firm Data," NBER Working Papers 5544, National Bureau of Economic Research, Inc.
- Chang-Yang Lee, 2002. "A simple model of R&D: An extension of the Dorfman-Steiner theorem," Applied Economics Letters, Taylor & Francis Journals, vol. 9(7), pages 449-452.
- Goldman, M. & Ergas, H. & Ralph, E. & Felker, G., 1997. "Technology Institutions and Policies. Their Role in Developing Technological Capability in Industry," Papers 383, World Bank - Technical Papers.
- Stewart, M.B., 1989.
"Union Wage Differentials, Product Market Influences And The Division Of Rents,"
The Warwick Economics Research Paper Series (TWERPS)
323, University of Warwick, Department of Economics.
- Stewart, Mark B, 1990. "Union Wage Differentials, Product Market Influences and the Division of Rents," Economic Journal, Royal Economic Society, vol. 100(403), pages 1122-1137, December.
- 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 569-596, September.
- Lynne G. Zucker & Michael R. Darby & Jeff Armstrong, 1994. "Intellectual Capital and the Firm: The Technology of Geographically Localized Knowledge Spillovers," NBER Working Papers 4946, National Bureau of Economic Research, Inc.
- Anders Malmberg & Dominic Power, 2005. "(How) Do (Firms in) Clusters Create Knowledge?," Industry and Innovation, Taylor & Francis Journals, vol. 12(4), pages 409-431.
- Ron Martin & Peter Sunley, 2002.
"Deconstructing Clusters: Chaotic Concept or Policy Panacea,"
wp244, Centre for Business Research, University of Cambridge.
- Ron Martin & Peter Sunley, 2003. "Deconstructing clusters: chaotic concept or policy panacea?," Journal of Economic Geography, Oxford University Press, vol. 3(1), pages 5-35, January.
- Catherine Beaudry, 2001. "Entry, Growth and Patenting in Industrial Clusters: A Study of the Aerospace Industry in the UK," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(3), pages 405-436.
- Fosfuri, Andrea & Ronde, Thomas, 2004. "High-tech clusters, technology spillovers, and trade secret laws," International Journal of Industrial Organization, Elsevier, vol. 22(1), pages 45-65, January.
- Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993.
"Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 108(3), pages 577-598.
- Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
- Jaffe, A.B. & Trajtenberg, M., 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," Papers 14-92, Tel Aviv.
- Lee, Chang-Yang & Sung, Taeyoon, 2005. "Schumpeter's legacy: A new perspective on the relationship between firm size and R&D," Research Policy, Elsevier, vol. 34(6), pages 914-931, August.
- Simona Iammarino & Philip McCann, 2006.
"The Structure and Evolution of Industrial Clusters: Transactions, Technology and Knowledge Spillovers,"
SPRU Working Paper Series
138, SPRU - Science and Technology Policy Research, University of Sussex.
- Iammarino, Simona & McCann, Philip, 2006. "The structure and evolution of industrial clusters: Transactions, technology and knowledge spillovers," Research Policy, Elsevier, vol. 35(7), pages 1018-1036, September.
- Zucker, Lynne G & Darby, Michael R & Brewer, Marilynn B, 1998. "Intellectual Human Capital and the Birth of U.S. Biotechnology Enterprises," American Economic Review, American Economic Association, vol. 88(1), pages 290-306, March.
- Paul Almeida & Bruce Kogut, 1999. "Localization of Knowledge and the Mobility of Engineers in Regional Networks," Management Science, INFORMS, vol. 45(7), pages 905-917, July.
- David Angel, 2002. "Inter-firm Collaboration and Technology Development Partnerships Within US Manufacturing Industries," Regional Studies, Taylor & Francis Journals, vol. 36(4), pages 333-344.
- Nickell, Stephen J, 1996.
"Competition and Corporate Performance,"
Journal of Political Economy,
University of Chicago Press, vol. 104(4), pages 724-746, August.
- Stefano Breschi & Francesco Lissoni, 2003. "Mobility and Social Networks: Localised Knowledge Spillovers Revisited," KITeS Working Papers 142, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Mar 2003.
- Audretsch, David B. & Feldman, Maryann P., 2004. "Knowledge spillovers and the geography of innovation," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 61, pages 2713-2739 Elsevier.
- Zucker, Lynne G & Darby, Michael R & Armstrong, Jeff, 1998. "Geographically Localized Knowledge: Spillovers or Markets?," Economic Inquiry, Western Economic Association International, vol. 36(1), pages 65-86, January.
- Catherine Beaudry & Stefano Breschi, 2003. "Are firms in clusters really more innovative?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(4), pages 325-342.
- Michele Bagella & Leonardo Becchetti, 2002. "The "geographical agglomeration-private R&D expenditure" effect: Empirical evidence on Italian data," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(3), pages 233-247.
- Baptista, Rui & Swann, Peter, 1998. "Do firms in clusters innovate more?," Research Policy, Elsevier, vol. 27(5), pages 525-540, September.
- Breschi, Stefano & Malerba, Franco, 2001. "The Geography of Innovation and Economic Clustering: Some Introductory Notes," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 817-833, December.
- Corinne Autant-Bernard, 2001. "The Geography Of Knowledge Spillovers And Technological Proximity," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(4), pages 237-254.
- Breschi, Stefano & Lissoni, Francesco, 2000.
"Knowledge Spillovers And Local Innovation Systems: A Critical Survey,"
ERSA conference papers
ersa00p362, European Regional Science Association.
- Breschi, Stefano & Lissoni, Francesco, 2001. "Knowledge Spillovers and Local Innovation Systems: A Critical Survey," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 975-1005, December.
- Stefano Breschi & Francesco Lissoni, 2001. "Knowledge spillovers and local innovation systems: a critical survey," LIUC Papers in Economics 84, Cattaneo University (LIUC).
- Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
- John Cantwell & Grazia D. Santangelo, 2002. "special issue: The new geography of corporate research in Information and Communications Technology (ICT)," Journal of Evolutionary Economics, Springer, vol. 12(1), pages 163-197.
- Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67, pages 297-297.
- McKelvey, Maureen & Alm, Hakan & Riccaboni, Massimo, 2003. "Does co-location matter for formal knowledge collaboration in the Swedish biotechnology-pharmaceutical sector?," Research Policy, Elsevier, vol. 32(3), pages 483-501, March.
- Anselin, Luc & Varga, Attila & Acs, Zoltan, 1997. "Local Geographic Spillovers between University Research and High Technology Innovations," Journal of Urban Economics, Elsevier, vol. 42(3), pages 422-448, November.
- Folta, Timothy B. & Cooper, Arnold C. & Baik, Yoon-suk, 2006. "Geographic cluster size and firm performance," Journal of Business Venturing, Elsevier, vol. 21(2), pages 217-242, March.
- Callois, Jean-Marc, 2008. "The two sides of proximity in industrial clusters: The trade-off between process and product innovation," Journal of Urban Economics, Elsevier, vol. 63(1), pages 146-162, January.
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:38:y:2009:i:7:p:1159-1171. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.