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Understanding absorptive capacities in an "innovation systems" context consequences for economic and employment growth

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  • Rajneesh Narula

Abstract

This paper seeks to broaden our understanding of the concept underlying absorptive capacity at the macro –level, paying particular attention to the growth and development perspectives. We provide definitions of absorptive and technological capacity, external technology flows, productivity growth, employment creation and their interrelations. We then analyse the elements of absorptive capability, focusing on the nature of the relationship within a systems view of an economy, focusing primarily on the role of firm and non-firm actors and the institutions that connect them, both within and across borders. We also undertake to explain how the nature of absorptive capacity changes with stages of economic development, and the importance of the different aspects of absorptive capability at different stages. The relationship is not a linear one: the benefits that accrue from marginal increases in absorptive capability change over time. Finally, we provide a tentative and preliminary conceptual argument of how the different stages of absorptive capacity are related to productivity growth, economic growth and employment creation.

Suggested Citation

  • Rajneesh Narula, 2004. "Understanding absorptive capacities in an "innovation systems" context consequences for economic and employment growth," DRUID Working Papers 04-02, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:04-02
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    Cited by:

    1. Tobias Schmidt, 2010. "Absorptive capacity-one size fits all? A firm-level analysis of absorptive capacity for different kinds of knowledge," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(1), pages 1-18.
    2. Andrew MOLD, 2004. "Fdi And Poverty Reduction: A Critical Reappraisal Of The Arguments," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 20, pages 91-122.
    3. Mario Cimoli & Marcio Holland & Gabriel Porcile & Annalisa Primi & Sebastiàn Vergara, 2006. "Growth, Structural Change and Technological Capabilities. Latin America in a Comparative Perspective," LEM Papers Series 2006/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Shafiei, Ehsan & Saboohi, Yadollah & Ghofrani, Mohammad B., 2009. "Optimal policy of energy innovation in developing countries: Development of solar PV in Iran," Energy Policy, Elsevier, vol. 37(3), pages 1116-1127, March.
    5. Hewitt-Dundas, Nola & Roper, Stephen, 2011. "Creating advantage in peripheral regions: The role of publicly funded R&D centres," Research Policy, Elsevier, vol. 40(6), pages 832-841, July.
    6. repec:nov:artigo:v:27:y:2017:i:1:p:7-34 is not listed on IDEAS
    7. Mario Cimoli & Gabriel Porcile, 2014. "Technology, structural change and BOP-constrained growth: a structuralist toolbox," Cambridge Journal of Economics, Oxford University Press, vol. 38(1), pages 215-237.
    8. Santangelo, Grazia D., 2009. "MNCs and linkages creation: Evidence from a peripheral area," Journal of World Business, Elsevier, vol. 44(2), pages 192-205, April.
    9. Cimoli, Mario & Porcile, Gabriel, 2011. "Tecnologia, heterogeneidad y crecimiento: una caja de herramientas estructuralista
      [Technology, heterogeneity and Growth: A Structuralist Toolbox]
      ," MPRA Paper 33801, University Library of Munich, Germany.
    10. Diani, Morad, 2012. "Architectures mondiales de la connaissance et de la créativité : Stratégies symétriques et dissonances cognitives
      [Global architectures of knowledge and creativity: Symmetrical strategies and cogni
      ," MPRA Paper 39755, University Library of Munich, Germany.
    11. Mario Cimoli & Wellington Pereira & Gabriel Porcile & Fábio Scatolin, 2011. "Structural change, technology, and economic growth: Brazil and the CIBS in a comparative perspective," Economic Change and Restructuring, Springer, vol. 44(1), pages 25-47, April.
    12. Ahmed, Elsadig Musa, 2012. "Are the FDI inflow spillover effects on Malaysia's economic growth input driven?," Economic Modelling, Elsevier, vol. 29(4), pages 1498-1504.
    13. Cimoli, Mario & Porcile, Gabriel, 2017. "Micro-macro interactions, growth and income distribution revisited," Desarrollo Productivo 212, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    14. Bento, Nuno & Fontes, Margarida, 2016. "The capacity for adopting energy innovations in Portugal: Historical evidence and perspectives for the future," Technological Forecasting and Social Change, Elsevier, vol. 113(PB), pages 308-318.
    15. Guarini, Giulio & Porcile, Gabriel, 2016. "Sustainability in a post-Keynesian growth model for an open economy," Ecological Economics, Elsevier, vol. 126(C), pages 14-22.
    16. Porcile, Gabriel & Sartorello Spinola, Danilo, 2018. "Natural, effective and BOP-constrained rates of growth: Adjustment mechanisms and closure equations," MERIT Working Papers 003, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    17. Cimoli, Mario & Martins, Antonio & Porcile, Gabriel & Sossdorf, Fernando, 2015. "Productivity, social expenditure and income distribution in Latin America," Desarrollo Productivo 201, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    18. Cimoli, Mario & Fleitas, Sebastian & Porcile, Gabriel, 2011. "Real Exchange Rate and the Structure of Exports," MPRA Paper 37846, University Library of Munich, Germany.
    19. -, 2014. "Perspectivas económicas de América Latina 2015: educación, competencias e innovación para el desarrollo," Coediciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37445 edited by Ocde, May.
    20. José Molero Zayas & Javier Portela & Isabel Álvarez, 2009. "Innovative MNEs’ Subsidiaries in different domestic environments," Working Papers del Instituto Complutense de Estudios Internacionales 0901, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.
    21. -, 2015. "Education, structural change and inclusive growth in Latin America," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37845 edited by Eclac, May.

    More about this item

    Keywords

    New economy; absorptive capacity; knowledge;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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