The effect of regional differences on the performance of software firms in the Netherlands
In this paper, we concentrate on how evolutionary economics contributes to a better understanding of the spatial evolution of newly emerging industries. Inspired by evolutionary thinking, four types of explanations are discussed and tested in an empirical analysis of the spatial pattern of the software sector in the Netherlands. Traditionally, agglomeration economies provide an explanation for the spatial concentration of an industry. Firms located in a cluster of similar or related sectors benefit from cost reductions, due to lower transportation costs, a thick labour market, specialised suppliers and information spillovers. An evolutionary approach on agglomeration economies provides an alternative view. It focuses explicit attention on knowledge spillovers as a vehicle of local diffusion of organizational routines or competences from one firm to the other. Such transfers of (tacit) knowledge are facilitated by spatial proximity of firms and a common knowledge base. In addition, an evolutionary approach takes a dynamic perspective on the role of agglomeration economies. During the initial stage of development of a new industry, the surrounding environment is still directed to routines and competences related to existing industries. When the new industry concentrates in a particular area to a considerable degree, a supportive environment (specialized knowledge, labour with specific skills) may gradually come into being, and localization economies may arise. Other evolutionary mechanisms may also provide an explanation for the spatial formation of new industries. We distinguish another three of them. First of all, transfer of knowledge and successful routines between firms in an emerging industry may occur through spin-off dynamics. Secondly, (social) networks may function as effective channels of knowledge diffusion and interactive learning, because they can provide a common knowledge base and mutual understanding and trust. Thirdly, firms in new industries with organizational capabilities that can deal effectively with the lack of required resources (such as knowledge, skills and capital) may become dominant, due to selection and imitation. Based on cross-sectional data gathered among 265 software firms in the Netherlands in 2003, we have tested which factors have influenced the innovative productivity of these firms. Using regression techniques, the outcomes suggest that spin-offs and firms with organizational capabilities perform better, while networks relations do not seem to affect the performance of software firms. Geography matters as well: software firms located in a region with a labour market with more ICT-skills show a higher innovative productivity.
|Date of creation:||2004|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.druid.dk/|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anselin, Luc & Varga, Attila & Acs, Zoltan, 1997. "Local Geographic Spillovers between University Research and High Technology Innovations," Journal of Urban Economics, Elsevier, vol. 42(3), pages 422-448, November.
- Ron A. Boschma & Jan G. Lambooy, 1999. "Evolutionary economics and economic geography," Journal of Evolutionary Economics, Springer, vol. 9(4), pages 411-429.
- Ron A. Boschma & Rik Wenting, 2004. "The spatial evolution of the British automobile industry," Papers in Evolutionary Economic Geography (PEEG) 0504, Utrecht University, Section of Economic Geography, revised Aug 2004.
- Salvatore Torrisi & Rosa Grimaldi, 2001.
"Codified-Tacit and General-Specific Knowledge in the division of labour among firms. A study of the Software Industry,"
LIUC Papers in Economics
85, Cattaneo University (LIUC).
- Grimaldi, Rosa & Torrisi, Salvatore, 2001. "Codified-tacit and general-specific knowledge in the division of labour among firms: A study of the software industry," Research Policy, Elsevier, vol. 30(9), pages 1425-1442, December.
- Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June.
- Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992.
"Growth in Cities,"
Journal of Political Economy,
University of Chicago Press, vol. 100(6), pages 1126-52, December.
- Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
- Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
- Casper, Steven & Whitley, Richard, 2004. "Managing competences in entrepreneurial technology firms: a comparative institutional analysis of Germany, Sweden and the UK," Research Policy, Elsevier, vol. 33(1), pages 89-106, January.
- Martin, Ron, 1999. "The New 'Geographical Turn' in Economics: Some Critical Reflections," Cambridge Journal of Economics, Oxford University Press, vol. 23(1), pages 65-91, January.
- P Haug, 1991. "Regional formation of high-technology service industries: the software industry in Washington State," Environment and Planning A, Pion Ltd, London, vol. 23(6), pages 869-884, June.
- Stefano Breschi & Francesco Lissoni, 2003. "Mobility and Social Networks: Localised Knowledge Spillovers Revisited," KITeS Working Papers 142, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Mar 2003.
- Jaffe, A.B. & Trajtenberg, M., 1992.
"Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations,"
14-92, Tel Aviv.
- Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
- Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
- Jan G. Lambooy & Ron A. Boschma, 2001.
"Evolutionary economics and regional policy,"
The Annals of Regional Science,
Springer, vol. 35(1), pages 113-131.
- P Haug, 1991. "Regional Formation of High-Technology Service Industries: The Software Industry in Washington State," Environment and Planning A, , vol. 23(6), pages 869-884, June.
- Michael S. Dahl & Christian Ø.R. Pedersen & Bent Dalum, 2003. "Entry by Spinoff in a High-tech Cluster," DRUID Working Papers 03-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Audretsch, David B & Feldman, Maryann P, 1998.
"Innovation in Cities: Science-Based Diversity, Specialization and Localized Competition,"
CEPR Discussion Papers
1980, C.E.P.R. Discussion Papers.
- Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, vol. 43(2), pages 409-429, February.
- Stuart, Toby & Sorenson, Olav, 2003. "The geography of opportunity: spatial heterogeneity in founding rates and the performance of biotechnology firms," Research Policy, Elsevier, vol. 32(2), pages 229-253, February.
- Ron Martin & Peter Sunley, 2002.
"Deconstructing Clusters: Chaotic Concept or Policy Panacea,"
ESRC Centre for Business Research - Working Papers
wp244, ESRC Centre for Business Research.
- Ron Martin & Peter Sunley, 2003. "Deconstructing clusters: chaotic concept or policy panacea?," Journal of Economic Geography, Oxford University Press, vol. 3(1), pages 5-35, January.
- Constance E. Helfat & Marvin B. Lieberman, 2002. "The birth of capabilities: market entry and the importance of pre-history," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 725-760, August.
- Meric S. Gertler, 2003. "Tacit knowledge and the economic geography of context, or The undefinable tacitness of being (there)," Journal of Economic Geography, Oxford University Press, vol. 3(1), pages 75-99, January.
- Agarwal, Rajshree & Echambadi, Raj & Franco, April M. & Sarkar, M. B., 2002. "Knowledge Transfer through Congenital Learning: Spin-Out Generation, Growth and Survival," Working Papers 02-0101, University of Illinois at Urbana-Champaign, College of Business.
- Veall, Michael R & Zimmermann, Klaus F, 1994. "Goodness of Fit Measures in the Tobit Model," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(4), pages 485-99, November.
- Lissoni, Francesco, 2001. "Knowledge codification and the geography of innovation: the case of Brescia mechanical cluster," Research Policy, Elsevier, vol. 30(9), pages 1479-1500, December.
- Bruderl, Josef & Preisendorfer, Peter, 1998. " Network Support and the Success of Newly Founded Businesses," Small Business Economics, Springer, vol. 10(3), pages 213-25, May.
- G. Buenstorf & S. Klepper, 2004. "The Origin and Location of Entrants in the Evolution of the U.S. Tire Industry," Papers on Economics and Evolution 2004-07, Philipps University Marburg, Department of Geography.
- Anders Malmberg & Peter Maskell, 2002. "The elusive concept of localization economies: towards a knowledge-based theory of spatial clustering," Environment and Planning A, Pion Ltd, London, vol. 34(3), pages 429-449, March.
When requesting a correction, please mention this item's handle: RePEc:aal:abbswp:04-07. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keld Laursen)
If references are entirely missing, you can add them using this form.