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Do Local Knowledge Spillovers Matter for Development? An Empirical Study of Uruguay’s Software Cluster

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  • Effie Kesidou
  • Henny Romijn

Abstract

Summary In economically advanced countries, local knowledge spillovers (LKS) between agglomerated firms are seen as major drivers of regional innovation and growth. In contrast, innovation research focusing on developing countries has emphasized international linkages, and has largely neglected LKS. This paper assesses the importance of LKS for innovation of clustered firms in a developing-country setting. An econometric analysis with new survey data from software firms in Montevideo, Uruguay, shows that LKS have a significantly positive impact on firms' innovation performance through labor mobility, company spin-offs, and informal interactions among actors. LKS are also shown to be highly important relative to other sources of knowledge.
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Suggested Citation

  • Effie Kesidou & Henny Romijn, 2006. "Do Local Knowledge Spillovers Matter for Development? An Empirical Study of Uruguay’s Software Cluster," Working Papers 06-11, Eindhoven Center for Innovation Studies, revised Oct 2006.
    • Handle: RePEc:ein:tuecis:0611
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    2. Theresia Gunawan & Jojo Jacob & Geert Duysters, 2016. "Network ties and entrepreneurial orientation: Innovative performance of SMEs in a developing country," International Entrepreneurship and Management Journal, Springer, vol. 12(2), pages 575-599, June.
    3. Crespi, Gustavo & Figal Garone, Lucas & Maffioli, Alessandro & Stein, Ernesto, 2020. "Public support to R&D, productivity, and spillover effects: Firm-level evidence from Chile," World Development, Elsevier, vol. 130(C).
    4. Majdi Anwar Quttainah, 2015. "Upper Echelon Theory: Role of Community and Strategy," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 1(3), pages 35-44, August.
    5. Telma Mendes & Vítor Braga & Carina Silva & Alexandra Braga, 2025. "The speed of internationalization in regionally clustered family firms: a deeper understanding of innovation activities and cluster affiliation," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 45(1), pages 51-108, March.
    6. Majdi Anwar QUTTAINAH, 2015. "Upper Echelon Theory: Role of Community and Strategy," Expert Journal of Business and Management, Sprint Investify, vol. 3(2), pages 171-181.
    7. Ciravegna, Luciano, 2011. "Technological learning in the Silicon Valleys of Latin America," MPRA Paper 36832, University Library of Munich, Germany.
    8. Anthony Howell, 2018. "Innovation and Firm Performance in the People’s Republic of China: A Structural Approach with Spillovers," ADBI Working Papers 805, Asian Development Bank Institute.
    9. Hansen, Ulrich Elmer & Lema, Rasmus, 2019. "The co-evolution of learning mechanisms and technological capabilities: Lessons from energy technologies in emerging economies," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 241-257.
    10. George C. S. Lin & Cassandra C. Wang & Yu Zhou & Yifei Sun & Yehua Dennis Wei, 2011. "Placing Technological Innovation in Globalising China," Urban Studies, Urban Studies Journal Limited, vol. 48(14), pages 2999-3018, November.
    11. Kesidou, Effie & Szirmai, Adam, 2008. "Local Knowledge Spillovers, Innovation and Economic Performance in Developing Countries: A discussion of alternative specifications," MERIT Working Papers 2008-033, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. Mauricio Maldonado & Teresa Noronha Vaz, 2015. "Knowledge Spillovers Within The Algarve Tourism Region. Evidence To Identify A Regional Innovation System," Spatial and Organizational Dynamics Discussion Papers 2015-4, CIEO-Research Centre for Spatial and Organizational Dynamics, University of Algarve.
    13. Ana Paula Lisboa Sohn & Filipa Dionísio Vieira & Nelson Casarotto Filho & Idaulo José Cunha & Paula Regina Zarelli, 2016. "Knowledge Transmission in Industrial Clusters: Evidence from EuroClusTex," European Planning Studies, Taylor & Francis Journals, vol. 24(3), pages 511-529, March.
    14. Ewert P. J. Kleynhans & Sibulele Zwedala, 2012. "The Contribution of FDI, Technology and R&D to Spillovers in Industrial Development: A South African Firm-Level Investigation," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 10(4 (Winter), pages 341-359.
    15. Yazid Abdullahi Abubakar & Jay Mitra & Adeyeye Mercy Modupe, 2018. "Mobile Telephony and New Business Formation Rates in BRICS and Beyond: Does Human Capital Matter?," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 4(2), pages 137-158, July.
    16. Valentina Pieroni & Nicola Lattanzi & Massimo Riccaboni, 2024. "The dynamic impact of inter-firm network agreements," Small Business Economics, Springer, vol. 63(3), pages 939-969, October.
    17. Sanghamitra Chakravarty & Georgina Mercedes Gómez, 2024. "A Development Lens to Frugal Innovation: Bringing Back Production and Technological Capabilities into the Discourse," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(1), pages 82-101, February.
    18. Jarrín-V, Pablo & Falconí, Fander & Cango, Pedro & Ramos-Martin, Jesus, 2021. "Knowledge gaps in Latin America and the Caribbean and economic development," World Development, Elsevier, vol. 146(C).
    19. Manning, Stephan & Ricart, Joan E. & Rosatti Rique, Maria Soledad & Lewin, Arie Y., 2010. "From blind spots to hotspots: How knowledge services clusters develop and attract foreign investment," Journal of International Management, Elsevier, vol. 16(4), pages 369-382, December.
    20. Amato Stefano & Shahab Zare & Lattanzi Nicola, 2024. "Is too small always bad? the role of place attachment in harnessing location advantages," International Entrepreneurship and Management Journal, Springer, vol. 20(1), pages 265-308, March.
    21. Basant, Rakesh & Chandra, Pankaj & Upadhyayula, Rajesh, 2011. "Knowledge Flows and Capability Building in the Indian IT Sector: A Comparative Analysis of Cluster and Non-Cluster Locations," IIMA Working Papers WP2011-10-02, Indian Institute of Management Ahmedabad, Research and Publication Department.
    22. Aiqi Wu & Cassandra C. Wang & Shengxiao Li, 2015. "Geographical knowledge search, internal R&D intensity and product innovation of clustering firms in Zhejiang, China," Papers in Regional Science, Wiley Blackwell, vol. 94(3), pages 553-572, August.
    23. Manning, Stephan, 2013. "New Silicon Valleys or a new species? Commoditization of knowledge work and the rise of knowledge services clusters," Research Policy, Elsevier, vol. 42(2), pages 379-390.

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