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original: Local milieu and innovations: Some empirical results


  • Daniel Shefer

    () (Center for Urban and Regional Studies, Technion - Israel Institute of Technology, Haifa, Israel)

  • Amnon Frenkel

    () (Center for Urban and Regional Studies, Technion - Israel Institute of Technology, Haifa, Israel)


Industrial innovations constitute a major factor in fostering the expansion of industrial activities and, consequently, regional growth. Innovations are closely tied to variables both internal and external to the structure and operation of the firm. The latter variables have hardly ever been investigated empirically. The current study utilizes data collected by means of a thorough personal interview of a representative sample of firms belonging to the three fastest-growing industries in Israel: Electronics, Plastics and Metals. All the firms are located in the Northern region of Israel and cover three different sub-regions: metropolitan core, intermediate zone and periphery. The paper reports an attempt to identify and quantify external factors clustered under the term, "local innovation milieu," and to analyze their effect on the rate of industrial innovation. More specifically, the present study describes the construction of alternative measures of industrial agglomeration economies and their effect on the probability of a firm`s belonging to different industrial branches when it comes to innovation. The results show that the size of the industry, as measured by the total number of employees, is the best explanatory measure of agglomeration economies in a particular sub-region. Agglomeration economies are significantly responsible for the increase in the rate of a firm`s innovation potential in the Electronics industry. In the Plastics industry, however, no significant effect of agglomeration economies on the rate of innovation is detected; and in the Metals industry, only a marginal effect is felt.

Suggested Citation

  • Daniel Shefer & Amnon Frenkel, 1998. "original: Local milieu and innovations: Some empirical results," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 32(1), pages 185-200.
  • Handle: RePEc:spr:anresc:v:32:y:1998:i:1:p:185-200

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    References listed on IDEAS

    1. W Buhr & M Köppel, 1986. "Regional investment functions of material infrastructure: theoretical issues and selected empirical case studies," Environment and Planning A, Pion Ltd, London, vol. 18(4), pages 491-509, April.
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    Cited by:

    1. Vincent Dautel & Olivier Walther, 2014. "The geography of innovation in a small metropolitan region: An intra-regional approach in Luxembourg," Papers in Regional Science, Wiley Blackwell, vol. 93(4), pages 703-725, November.
    2. Dirk Czarnitzki & Hanna Hottenrott, 2009. "Are Local Milieus The Key To Innovation Performance?," Journal of Regional Science, Wiley Blackwell, vol. 49(1), pages 81-112.
    3. Karima Kourtit & Peter Nijkamp & Soushi Suzuki, 2013. "The Rat Race between World Cities: In Search of Exceptional Places by Means of Super-Efficient Data Development Analysis," Tinbergen Institute Discussion Papers 13-104/VIII, Tinbergen Institute.
    4. Hans Ouwersloot & Piet Rietveld, 2000. "The Geography of R&D; Tobit Analysis and Bayesian Approach to Mapping R&D Activities for The Netherlands," Tinbergen Institute Discussion Papers 00-043/3, Tinbergen Institute.
    5. Broekel, Tom & Boschma, Ron, 2017. "The cognitive and geographical structure of knowledge links and how they influence firms’ innovation performance," MPRA Paper 76805, University Library of Munich, Germany.
    6. Ejermo, Olof & Hansen, Høgni Kalsø, 2014. "How Important are Local Inventive Milieus: The role of Birthplace, High School and University Education," Papers in Innovation Studies 2014/15, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    7. repec:enr:rpaper:0020 is not listed on IDEAS
    8. Crass, Dirk & Rammer, Christian & Aschhoff, Birgit, 2016. "Geographical clustering and the effectiveness of public innovation programs," ZEW Discussion Papers 16-083, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    9. Maré, Dave C. & Fabling, Richard & Stillman, Steven, 2011. "Immigration and Innovation," IZA Discussion Papers 5686, Institute for the Study of Labor (IZA).
    10. Neil Lee & Andrés Rodríguez-Pose, 2013. "Original Innovation, Learnt Innovation and Cities: Evidence from UK SMEs," Urban Studies, Urban Studies Journal Limited, vol. 50(9), pages 1742-1759, July.
    11. Roberto Antonietti, 2015. "Does Local Creative Employment Affect Firm Innovativeness? Microeconometric Evidence from Italy," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2015(3), pages 5-29.
    12. Tom Broekel & Thomas Brenner, 2011. "Regional factors and innovativeness: an empirical analysis of four German industries," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(1), pages 169-194, August.
    13. DAUTEL Vincent & WALTHER Olivier, 2011. "The geography of innovation in the Luxembourg metropolitan region: an intra-regional approach," LISER Working Paper Series 2011-38, LISER.
    14. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
    15. Alessia Lo Turco & Daniela Maggioni, 2017. "Local Discoveries and Technological Relatedness: the Role of Foreign Firms," Papers in Evolutionary Economic Geography (PEEG) 1710, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2017.
    16. David C. Maré & Richard Fabling & Steven Stillman, 2014. "Innovation and the local workforce," Papers in Regional Science, Wiley Blackwell, vol. 93(1), pages 183-201, March.
    17. Yanrui Wu, 2012. "R&D Behaviour in Chinese Firms," Economics Discussion / Working Papers 12-26, The University of Western Australia, Department of Economics.
    18. Roper, Stephen & Love, James H. & Bonner, Karen, 2017. "Firms’ knowledge search and local knowledge externalities in innovation performance," Research Policy, Elsevier, vol. 46(1), pages 43-56.
    19. Roper, Stephen & Hewitt-Dundas, Nola & Love, James H., 2004. "An ex ante evaluation framework for the regional benefits of publicly supported R&D projects," Research Policy, Elsevier, vol. 33(3), pages 487-509, April.
    20. Meng, Rüdiger, 2009. "Standort und Innovation - Innovationsaktivitäten und Forschungskooperationen von Unternehmen aus regionaler Perspektive," Arbeitsmaterial der ARL: Aufsätze,in: Innovationen im Raum - Raum für Innovationen: 11. Junges Forum der ARL, 21. bis 23. Mai 2008 in Berlin, pages 40-52 Akademie für Raumforschung und Landesplanung (ARL) - Leibniz-Forum für Raumwissenschaften.
    21. Love, James H. & Roper, Stephen, 2001. "Location and network effects on innovation success: evidence for UK, German and Irish manufacturing plants," Research Policy, Elsevier, vol. 30(4), pages 643-661, April.
    22. Yoshihiro Kameyama, 2011. "Effects of Technological Networks of Small and Medium-sized Firms on their R&D Activities in Shihwa Industrial Complex, Korea: Toward Industrial Cluster Formation and Regional Integration," Chapters,in: Industrial Clusters, Upgrading and Innovation in East Asia, chapter 10 Edward Elgar Publishing.
    23. repec:elg:eechap:14395_12 is not listed on IDEAS
    24. Roper, Stephen & Love, James H., 2002. "Innovation and export performance: evidence from the UK and German manufacturing plants," Research Policy, Elsevier, vol. 31(7), pages 1087-1102, September.

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