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Firm innovation in policy-driven parks and spontaneous clusters: the smaller firm the better?

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  • Kuo-Feng Huang
  • Chwo-Ming Yu
  • Dah-Hsian Seetoo

Abstract

Mixed evidence has been found regarding how locating in a cluster or a park affects firms’ performance. This paper investigates how locating in different types of clusters and parks interacted by firm size or in-house R&D capability affects a firm’s innovation. Empirically testing the research hypotheses by the data of 165 Taiwan’s manufacturing firms in the information and communication technology sector and taking policy-driven parks (e.g., science parks and industrial parks) and spontaneously clusters as examples, we find that in emerging economies, firms with inferior in-house R&D capability gain more innovation benefits by locating in a science park or a spontaneous cluster while smaller firms gain more innovation benefits by locating in an industry park or a spontaneous cluster. Moreover, our findings also suggest that locating in a science park, smaller firms benefit more than larger firms in terms of innovation performance whereas larger firms benefit more than smaller firms in terms of market performance. The findings suggest that in emerging economies, compared to larger firms, smaller firms are less influenced by negative spillover effect when locating in clusters or parks. Copyright Springer Science+Business Media, LLC 2012

Suggested Citation

  • Kuo-Feng Huang & Chwo-Ming Yu & Dah-Hsian Seetoo, 2012. "Firm innovation in policy-driven parks and spontaneous clusters: the smaller firm the better?," The Journal of Technology Transfer, Springer, vol. 37(5), pages 715-731, October.
    • Handle: RePEc:kap:jtecht:v:37:y:2012:i:5:p:715-731
    DOI: 10.1007/s10961-012-9248-9
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    More about this item

    Keywords

    Agglomeration effect; SMEs; In-house R&D; Science-based parks; O32; R1; R12;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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