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Innovation and Connectivity: The Nature of Market Linkages and Innovation Networks in Canadian Manufacturing Industries

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  • Peters, Alice
  • Baldwin, John R.

Abstract

This paper investigates the extent to which customers/suppliers innovation networks are related to the size and pattern of inter-industry goods flows. It does so by devising a diversification index to measure the nature of inter-industry links that arise from the flow of goods and services from suppliers to customers. It then relates these diversification patterns to the importance of customer and supplier innovation networks. Input/output matrices are used to measure the extent of inter-industry links and the pattern of inter-industry goods flows. The importance of customer/supplier networks is derived from data coming from the 1993 Survey of Innovation and Advanced Technology. The study finds that the importance of supplier and of customer innovation networks is related to the structure of inter-industry trade flows. Where there are a small number of important backward inter-industry links, firms are more likely to make greater use of supplier partnerships. On the other hand, the importance of customer links increases when there is a large number of industry linkages downstream.

Suggested Citation

  • Peters, Alice & Baldwin, John R., 2001. "Innovation and Connectivity: The Nature of Market Linkages and Innovation Networks in Canadian Manufacturing Industries," Analytical Studies Branch Research Paper Series 2001165e, Statistics Canada, Analytical Studies Branch.
    • Handle: RePEc:stc:stcp3e:2001165e
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    File URL: https://www150.statcan.gc.ca/n1/en/catalogue/11F0019M2001165
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    References listed on IDEAS

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    1. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107, Elsevier.
    2. Peters, Alice & Beckstead, Desmond & Gellatly, Guy & Baldwin, John R. & Yates, Janice, 2000. "Patterns of Corporate Diversification in Canada: An Empirical Analysis," Analytical Studies Branch Research Paper Series 2000150e, Statistics Canada, Analytical Studies Branch.
    3. Sukkoo Kim, 1996. "Changing structure of U.S. regions: a historical perspective," Assessing the Midwest Economy SP-1, Federal Reserve Bank of Chicago.
    4. Baldwin, John R., 1997. "The Importance of Research and Development for Innovation in Small and Large Canadian Manufacturing Firms," Analytical Studies Branch Research Paper Series 1997107e, Statistics Canada, Analytical Studies Branch.
    5. Leroy P. Jones, 1976. "The Measurement of Hirschmanian Linkages," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(2), pages 323-333.
    6. Pan A. Yotopoulos & Jeffrey B. Nugent, 1973. "A Balanced-Growth Version of the Linkage Hypothesis: A Test," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(2), pages 157-171.
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    Cited by:

    1. Beckstead, Desmond Burrows, Sëan Gellatly, Guy, 2007. "New Economy: Using National Accounting Architecture to Estimate the Size of the High-technology Economy," The Canadian Economy in Transition 2007015e, Statistics Canada, Economic Analysis Division.
    2. Yanling Wang, 2010. "FDI and productivity growth: the role of inter‐industry linkages," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(4), pages 1243-1272, November.
    3. Peters, Alice & Beckstead, Desmond & Gellatly, Guy & Baldwin, John R. & Yates, Janice, 2000. "Patterns of Corporate Diversification in Canada: An Empirical Analysis," Analytical Studies Branch Research Paper Series 2000150e, Statistics Canada, Analytical Studies Branch.
    4. Yanling Wang, 2013. "Exposure to FDI and new plant survival: evidence in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(1), pages 46-77, February.
    5. Yanling Wang, 2010. "Exposure to FDI and New Plant Survival: Evidence in Canada," Carleton Economic Papers 10-05, Carleton University, Department of Economics.
    6. Alla Lileeva, 2010. "The benefits to domestically owned plants from inward direct investment: the role of vertical linkages," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(2), pages 574-603, May.

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