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Micro-Evidence on the Determinants of Innovation in The Netherlands: The Relative Importance of Absorptive Capacity and Agglomeration Externalities

Author

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  • Martijn J. Smit

    (VU University Amsterdam)

  • Maria A. Abreu

    (University of Groningen, University of Cambridge)

  • Henri L.F. de Groot

    (VU University)

Abstract

This discussion paper resulted in a publication in 'Papers in Regional Science' . This paper employs firm-level data to analyze the relative importance of firm characteristics and agglomeration externalities in explaining variation in innovation rates across firms. More specifically, we combine micro-data and census data to estimate the probability that a firm will introduce a goods, service or process innovation. We consider internal firm-level characteristics as well as externalities, using information on the regional production structure to test for Marshall-Arrow-Romer, Porter and Jacobs effects. Our results show that most firm-specific variables are highly statistically significant, whereas agglomeration variables are only significant for a few specific sectors, and even then only for some types of innovation.

Suggested Citation

  • Martijn J. Smit & Maria A. Abreu & Henri L.F. de Groot, 2010. "Micro-Evidence on the Determinants of Innovation in The Netherlands: The Relative Importance of Absorptive Capacity and Agglomeration Externalities," Tinbergen Institute Discussion Papers 10-060/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20100060
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    1. Mohamed Amara & Khaled Thabet, 2019. "Firm and regional factors of productivity: a multilevel analysis of Tunisian manufacturing," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(1), pages 25-51, August.
    2. Paola Cardamone & Valeria Pupo & Fernanda Ricotta, 2018. "Exploring the relationship between university and innovation: evidence from the Italian food industry," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(5), pages 673-696, September.
    3. Enrique López-Bazo & Elisabet Motellón, 2016. "“Innovation, heterogeneous firms, and the region”," AQR Working Papers 201607, University of Barcelona, Regional Quantitative Analysis Group, revised Apr 2016.
    4. Richard Harris & John Moffat, 2011. "R&D, Innovation and Exporting," SERC Discussion Papers 0073, Centre for Economic Performance, LSE.
    5. Timo Mitze & Teemu Makkonen, 2020. "When interaction matters: the contingent effects of spatial knowledge spillovers and internal R&I on firm productivity," The Journal of Technology Transfer, Springer, vol. 45(4), pages 1088-1120, August.
    6. Maria De Paola & Michela Ponzo & Vincenzo Scoppa, 2018. "Are Men Given Priority for Top Jobs? Investigating the Glass Ceiling in Italian Academia," Journal of Human Capital, University of Chicago Press, vol. 12(3), pages 475-503.
    7. Cristiano Antonelli & Alessandra Colombelli, 2018. "The cost of knowledge," Chapters, in: The Evolutionary Complexity of Endogenous Innovation, chapter 6, pages 128-150, Edward Elgar Publishing.
    8. Fikri Zul Fahmi, 2016. "Business networks, social capital and the productivity of creative industries in Indonesia," ERSA conference papers ersa16p351, European Regional Science Association.
    9. Luong Vinh Quoc Duy & Damien Cassells, 2022. "Agglomeration and innovation effort: A longitudinal study on small and medium manufacturing enterprises in Vietnam," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1252-1268, August.
    10. Soriano, Franklin A. & Villano, Renato A. & Fleming, Euan M. & Battese, George E., 2018. "What’s driving innovation in small businesses in Australia? The case of the food industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(1), October.
    11. Grashof, Nils, 2020. "Putting the watering can away Towards a targeted (problem-oriented) cluster policy framework," Papers in Innovation Studies 2020/4, Lund University, CIRCLE - Centre for Innovation Research.
    12. Antonelli, Cristiano & Colombelli, Alessandra, 2015. "The knowledge cost function," International Journal of Production Economics, Elsevier, vol. 168(C), pages 290-302.
    13. Hundt, Christian & Holtermann, Linus & Steeger, Jonas & Bersch, Johannes, 2019. "Cluster externalities, firm capabilities, and the recessionary shock: How the macro-to-micro-transition shapes firm performance during stable times and times of crisis," ZEW Discussion Papers 19-008, ZEW - Leibniz Centre for European Economic Research.
    14. Martijn J. Smit, 2017. "Innovation through new blood," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(3), pages 543-578, May.
    15. Lorena M. D'Agostino & Rosina Moreno, 2019. "Green regions and local firms' innovation," Papers in Regional Science, Wiley Blackwell, vol. 98(4), pages 1585-1608, August.
    16. Haschka, Rouven E. & Herwartz, Helmut, 2020. "Innovation efficiency in European high-tech industries: Evidence from a Bayesian stochastic frontier approach," Research Policy, Elsevier, vol. 49(8).
    17. Tomasz & Anna Golejewska, 2017. "Regional variation of innovation activity in Poland. The positive role of location in metropolitan areas affirmed," Working Papers of Economics of European Integration Division 1701, The Univeristy of Gdansk, Faculty of Economics, Economics of European Integration Division.
    18. Shu Yu & Takaya Yuizono, 2021. "A Proximity Approach to Understanding University-Industry Collaborations for Innovation in Non-Local Context: Exploring the Catch-Up Role of Regional Absorptive Capacity," Sustainability, MDPI, vol. 13(6), pages 1-19, March.
    19. Nils Grashof, 2020. "Spill over or Spill out? - A multilevel analysis of the cluster and firm performance relationship," Papers in Evolutionary Economic Geography (PEEG) 2013, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2020.

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    More about this item

    Keywords

    innovation; absorptive capacity; agglomeration externalities; Community Innovation Survey; micro-data; firm behavior;
    All these keywords.

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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