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A Matter of Location: The Role of Regional Social Capital in Overcoming the Liability of Newness in R&D Acquisition Activities

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  • Keld Laursen
  • Francesca Masciarelli
  • Toke Reichstein

Abstract

External knowledge acquisition represents a precondition for firms’ competitive advantage. However, young firms find it particularly difficult to gain access to external sources of knowledge: young firms suffer from a liability of newness by exhibiting significantly lower propensities to invest in external R&D than their older counterparts. We explore the role of geographically bound social capital in moderating this liability. By employing a Nested Logit approach, our findings show that geographically bound social capital moderates the liability of newness related to R&D acquisition, suggesting that the liability exists only in regions associated with low levels of social capital.

Suggested Citation

  • Keld Laursen & Francesca Masciarelli & Toke Reichstein, 2010. "A Matter of Location: The Role of Regional Social Capital in Overcoming the Liability of Newness in R&D Acquisition Activities," DRUID Working Papers 10-25, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:10-25
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    References listed on IDEAS

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    1. Elfring, Tom & Hulsink, Willem, 2003. "Networks in Entrepreneurship: The Case of High-Technology Firms," Small Business Economics, Springer, vol. 21(4), pages 409-422, December.
    2. Sjoerd Beugelsdijk & Ton Van Schaik, 2005. "Differences in social capital between 54 Western European regions," Regional Studies, Taylor & Francis Journals, vol. 39(8), pages 1053-1064.
    3. Bruno Cassiman & Reinhilde Veugelers, 2006. "In Search of Complementarity in Innovation Strategy: Internal R& D and External Knowledge Acquisition," Management Science, INFORMS, vol. 52(1), pages 68-82, January.
    4. 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.
    5. Ron Boschma & Simona Iammarino, 2009. "Related Variety, Trade Linkages, and Regional Growth in Italy," Economic Geography, Clark University, vol. 85(3), pages 289-311, July.
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    Keywords

    Research and development; social capital; liability of newness; geography;

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