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A matching analysis of why some firms in peripheral regions undertake R&D whereas others do not

  • Richard Harris
  • Mary Trainor

Many studies have established the importance of investment in R&D to facilitate innovation and consequently improve firm productivity. Firms decide whether or not to undertake R&D depending on a range of factors such as market orientation, business objectives, competitive advantages and absorptive capacity. This paper studies the factors that influence this decision in peripheral locations; and for firms that do not undertake R&D, we analyse the reasons for not doing so. The research is based on data from a survey of some 250 matched firms operating in Northern Ireland, about half undertaking R&D and half not. Northern Ireland is an interesting case study because it exhibits a low level of investment in R&D despite the public subsidies and policy initiatives that have existed over the last 30 years. For firms that undertake R&D, our results mostly confirm the findings of others while for firms that do not undertake R&D the results point to a capabilities-gap rather than a resource-gap as the fundamental problem. Policy conclusions are drawn as to what might be done to boost both the amount of R&D undertaken and the number of firms engaged in R&D in peripheral regions.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/10438599.2010.494098
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Article provided by Taylor & Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 20 (2011)
Issue (Month): 4 ()
Pages: 367-385

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Handle: RePEc:taf:ecinnt:v:20:y:2011:i:4:p:367-385
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