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SMEs’ Absorptive Capacities and Large Firms’ Knowledge Spillovers: Micro Evidence from the Machining Industry in Mexico

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  • Claudia de Fuentes

    () (Sobey School of Business, Saint Mary’s University)

  • Gabriela Dutrénit

    () (Postgraduate Program in Economic and Management of Innovation, Universidad Autónoma MetropolitanaXochimilco)

Abstract

The aim of this paper is to analyse the relationship between large firms’ knowledge spillovers and small and medium enterprises’ absorptive capacities. We build ad hoc indicators for these two concepts following a factor analysis methodology, and carry out a structural equations analysis to determine the relationship between them. Based on firm level data from a survey that focuses on SMEs of the machining industry in a Mexican locality, this paper argues that in a low-tech and mature sector, which operates in a loosely articulated local system, two knowledge spillover mechanisms are relevant – the backward linkages and the employees’ mobility. SMEs’ absorptive capacities are strongly influenced by organisational capabilities and innovation and learning activities. We also argue that large firms’ knowledge spillovers are strongly correlated with SMEs’ absorptive capacities within the sector and locality analysed.

Suggested Citation

  • Claudia de Fuentes & Gabriela Dutrénit, 2013. "SMEs’ Absorptive Capacities and Large Firms’ Knowledge Spillovers: Micro Evidence from the Machining Industry in Mexico," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 5(1), pages 1-30, April.
  • Handle: RePEc:umk:journl:v:5:y:2013:i:1:p:1-30
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    Keywords

    diffusion processes; economic development; entrepreneurship; knowledge; Latin America; machinery; models; regional economic activity; SME; technological change;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • 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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