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The Impact of Face-to-face and Frequent Interactions on Innovation: Evidence from Upstream-Downstream Relations

Author

Listed:
  • Tomohiro Machikita

    () (Institute of Developing Economies, Inter-disciplinary Studies Center Japan External Trade Organization (IDE-JETRO), Japan)

  • Yasushi Ueki

    () (Institute of Developing Economies, Bangkok Research Center Japan External Trade Organization Thailand)

Abstract

This paper proposes a new mechanism linking innovation and networks in developing economies to identify explicit production and information linkages. We investigate the testable hypotheses of these linkages using survey data gathered from manufacturing firms in East Asia: Indonesia, Thailand, the Philippines, and Vietnam. We found that firms that dispatched engineers to customers achieved more product and process innovations than firms that did not. Just-in-time relationship is effective for dealing with process innovation. We found that such strong complementarities as Just-in-time are not effective for product innovation. These findings support the hypothesis that face-to-face communication and strong complementarities among buyer-seller networks have different roles in product and process innovation.

Suggested Citation

  • Tomohiro Machikita & Yasushi Ueki, 2011. "The Impact of Face-to-face and Frequent Interactions on Innovation: Evidence from Upstream-Downstream Relations," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 3(3), pages 519-548, October.
  • Handle: RePEc:umk:journl:v:3:y:2011:i:3:p:519-548
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    File URL: http://ijie.um.edu.my/RePEc/umk/journl/v3i3/Fulltext6.pdf
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    References listed on IDEAS

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    1. Marcus Berliant & Masahisa Fujita, 2008. "Knowledge Creation As A Square Dance On The Hilbert Cube," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1251-1295, November.
    2. Marcus Berliant & Masahisa Fujita, 2009. "Dynamics of knowledge creation and transfer: The two person case," International Journal of Economic Theory, The International Society for Economic Theory, vol. 5(2), pages 155-179.
    3. Tomohiro Machikita & Yasushi Ueki, 2011. "Innovation in Linked and Non-linked Firms: Effects of Variety of Linkages in East Asia," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 3(1), pages 77-102, April.
    4. Rasiah, Rajah, 1994. "Flexible Production Systems and Local Machine-Tool Subcontracting: Electronics Components Transnationals in Malaysia," Cambridge Journal of Economics, Oxford University Press, vol. 18(3), pages 279-298, June.
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    6. Vega-Jurado, Jaider & Gutiérrez-Gracia, Antonio & Fernández-de-Lucio, Ignacio & Manjarrés-Henri­quez, Liney, 2008. "The effect of external and internal factors on firms' product innovation," Research Policy, Elsevier, vol. 37(4), pages 616-632, May.
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    Citations

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    Cited by:

    1. Masatsugu Tsuji & Syoichi Miyahara, 2011. "Agglomeration and Local Innovation Networks in Japanese SMEs: Analysis of the Information Linkage," Chapters,in: Industrial Clusters, Upgrading and Innovation in East Asia, chapter 11 Edward Elgar Publishing.
    2. Akifumi Kuchiki & Masatsugu Tsuji (ed.), 2011. "Industrial Clusters, Upgrading and Innovation in East Asia," Books, Edward Elgar Publishing, number 14504.

    More about this item

    Keywords

    - exchanges of engineer; innovation; insider econometrics; just-in-time; status quo;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • 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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