Complementarities between knowledge sources for innovation: an analysis of production networks in Argentina

These days, innovation increasingly requires a combination of internal and external sources of knowledge. The relative importance of each may differ, according to the characteristics of the production networks in which firms are involved, and according to the local context. This paper contributes to explaining the relative importance of the various linkages that provide access to knowledge sources in specific contexts. It is argued that internationalization is part of the geography of those linkages, as well as a main driver of production networks, while the connections within domestic systems are not negligible in improving firms’ innovation results in some contexts (such as those found in emerging economies). Tests around complementarity, applied to cross-sectional firm-level data on automotive and iron/steel networks in Argentina, reveal that instead of acting as substitutes, significant complementarities do exist between internal and external sources of knowledge. Meanwhile, the relevance of foreign sources cannot be absolutely confirmed as determinant in this specific context.