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Firm Size And Capabilities, Regional Agglomeration, And The Adoption Of New Technology

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  • Maryellen Kelley
  • Susan Helper

Abstract

The literature on agglomeration economies suggests that, in addition to firm-specific attributes, the local geographic context conditions the expected profitability of technology adoption. All rheories of technology diffusion assumc that inter-firm learning is the outcome of contact with prior adopters. Yet, with few exceptions, thc attributes of location that maximize the opportunities for learning (and hence, reduce thc costs of technology adoption for all firms in the same locale) have been given only cursory treatment. In this paper, we develop and test a model in which both firm-specific capabilities and placc-specific cxtcrnal economies affect the firm's decision to adopt a new technology. Our data colile from two national surveys conducted in 1987 and 1991. Because we have information on two different time periods, we are able to specify firm and place-specific conditions that precede the technology adoption decision. We find that localization (as measured by regional clustering of enterprises in related industries) and urbanizalion (as mcasured by the diversity of industries, and by the concentration of degree granting engineering institutions) provide knowledge spillovers that facilitate the adoption of new tcchnology by local establishments. Moreover, the impact of urbanization econonlies is size-related: The impact of a diverse region on adoption is evcn greater for small enterprises than for large ones.

Suggested Citation

  • Maryellen Kelley & Susan Helper, 1999. "Firm Size And Capabilities, Regional Agglomeration, And The Adoption Of New Technology," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 8(1-2), pages 79-103.
  • Handle: RePEc:taf:ecinnt:v:8:y:1999:i:1-2:p:79-103
    DOI: 10.1080/10438599900000005
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    References listed on IDEAS

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    1. Susan Helper, 1995. "Supplier Relations and Adoption of New Technology: Results of Survey Research in the U.S. Auto Industry," NBER Working Papers 5278, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December.
    2. Suzanne Kok, 2013. "Returns to Communication in Specialised and Diversified US Cities," CPB Discussion Paper 236, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2014. "The nexus between labor diversity and firm’s innovation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 303-364, April.
    4. Martin Andersson & Lina Bjerke & Charlie Karlsson, 2014. "Imports and regional development," Chapters,in: Knowledge, Innovation and Space, chapter 4, pages 80-102 Edward Elgar Publishing.
    5. Olof Ejermo, 2002. "Knowledge Production in Swedish Functional Regions 1993-1999," KITeS Working Papers 140, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Feb 2003.
    6. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2014. "The nexus between labor diversity and firm’s innovation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 303-364, April.
    7. Klimenko, Mikhail M., 2004. "Competition, matching, and geographical clustering at early stages of the industry life cycle," Journal of Economics and Business, Elsevier, vol. 56(3), pages 177-195.
    8. Wiig Aslesen, Heidi, 2000. "Innovation Performance In The Capital Region Of Norway. Potentials For Improvement," ERSA conference papers ersa00p388, European Regional Science Association.
    9. Diego Puga, 2017. "The changing distribution of firms and workers across cities," Development Working Papers 418, Centro Studi Luca d'Agliano, University of Milano, revised 21 Feb 2017.
    10. Olof Ejermo, 2005. "Technological Diversity and Jacobs' Externality Hypothesis Revisited," Growth and Change, Wiley Blackwell, vol. 36(2), pages 167-195.
    11. Puga, Diego, 2008. "Agglomeration and cross-border infrastructure," EIB Papers 9/2008, European Investment Bank, Economics Department.
    12. Adelheid Holl & Rafael Pardo & Ruth Rama, 2013. "Spatial patterns of adoption of just-in-time manufacturing," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 51-67, March.
    13. Neil Lee & Max Nathan, 2011. "Does Cultural Diversity Help Innovation in Cities: Evidence from London Firms," SERC Discussion Papers 0069, Spatial Economics Research Centre, LSE.
    14. Steingraber, Ronivaldo & Gonçalves, Flávio, 2011. "Productivity differences in Brazilian manufacturing firms, by industrial sector: school bullying and academic achievement," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    15. Burger, M.J. & van Oort, F.G. & Raspe, O., 2010. "Agglomeration and New Establishment Survival: A Mixed Hierarchical and Cross-Classified Model," ERIM Report Series Research in Management ERS-2010-018-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    16. Cristiano Antonelli, 2000. "Collective Knowledge Communication and Innovation: The Evidence of Technological Districts," Regional Studies, Taylor & Francis Journals, vol. 34(6), pages 535-547.
    17. Chris Forman & Avi Goldfarb & Shane Greenstein, 2005. "Technology Adoption In and Out of Major Urban Areas: When Do Internal Firm Resources Matter Most?," NBER Working Papers 11642, National Bureau of Economic Research, Inc.
    18. No, Angela, 2008. "Cities and Growth: Knowledge Spillovers in the Adoption of Advanced Manufacturing Technologies," The Canadian Economy in Transition 2008018e, Statistics Canada, Economic Analysis Division.
    19. Joshua Drucker, 2009. "Trends in Regional Industrial Concentration in the United States," Working Papers 09-06, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Keywords

    Agglomeration economies; Technology adoption; Knowledge spillovers; Small business; Regional economies; Survey research JEL Classification: 030; R11;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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