IDEAS home Printed from https://ideas.repec.org/p/unm/umamer/2004004.html
   My bibliography  Save this paper

Understanding absorptive capacities in an "innovation systems" context: consequences for economic and employment growth

Author

Listed:
  • Narula, Rajneesh

    (MERIT)

Abstract

This paper seeks to broaden our understanding of the concept underlying absorptive capacity at the macro–level, paying particular attention to the growth and development perspectives. We provide definitions of absorptive and technological capacity, external technology flows, productivity growth, employment creation and their interrelations. We then analyse the elements of absorptive capability, focusing on the nature of the relationship within a systems view of an economy, focusing primarily on the role of firm and non-firm actors and the institutions that connect them, both within and across borders. We also undertake to explain how the nature of absorptive capacity changes with stages of economic development, and the importance of the different aspects of absorptive capability at different stages. The relationship is not a linear one: the benefits that accrue from marginal increases in absorptive capability change over time. Finally, we provide a tentative and preliminary conceptual argument of how the different stages of absorptive capacity are related to productivity growth, economic growth and employment creation.

Suggested Citation

  • Narula, Rajneesh, 2004. "Understanding absorptive capacities in an "innovation systems" context: consequences for economic and employment growth," Research Memorandum 004, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:umamer:2004004
    as

    Download full text from publisher

    File URL: https://unu-merit.nl/publications/rmpdf/2004/rm2004-004.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February.
    2. Bryan K. Ritchie, 2002. "Foreign Direct Investment and Intellectual Capital Formation in Southeast Asia," OECD Development Centre Working Papers 194, OECD Publishing.
    3. Paola Criscuolo & Rajneesh Narula, 2008. "A novel approach to national technological accumulation and absorptive capacity: aggregating Cohen and Levinthal," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(1), pages 56-73.
    4. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(2), pages 385-406, June.
    5. Linsu Kim, 1995. "Absorptive Capacity and Industrial Growth: A Conceptual Framework and Korea’s Experience," Palgrave Macmillan Books, in: Bon Ho Koo & Dwight H. Perkins (ed.), Social Capability and Long-Term Economic Growth, chapter 13, pages 266-287, Palgrave Macmillan.
    6. Oyelaran-Oyeyinka, Banji & Barclay, Lou Anne, 2003. "Systems of Innovation and Human Capital in African Development," UNU-INTECH Discussion Paper Series 2003-02, United Nations University - INTECH.
    7. Ethan B. Kapstein, 2002. "Virtuous Circles? Human Capital Formation, Economic Development and the Multinational Enterprise," OECD Development Centre Working Papers 191, OECD Publishing.
    8. Marco Vivarelli, 2015. "Innovation and employment," IZA World of Labor, Institute of Labor Economics (IZA), pages 154-154, May.
    9. Ronald Findlay, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(1), pages 1-16.
    10. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    11. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    12. Matthew J. Slaughter, 2002. "Skill Upgrading in Developing Countries: Has Inward Foreign Direct Investment Played a Role?," OECD Development Centre Working Papers 192, OECD Publishing.
    13. Carl J. Dahlman & Richard Nelson, 1995. "Social Absorption Capability, National Innovation Systems and Economic Development," Palgrave Macmillan Books, in: Bon Ho Koo & Dwight H. Perkins (ed.), Social Capability and Long-Term Economic Growth, chapter 5, pages 82-122, Palgrave Macmillan.
    14. Katrak, Homi, 2002. "Does economic liberalisation endanger indigenous technological developments?: An analysis of the Indian experience," Research Policy, Elsevier, vol. 31(1), pages 19-30, January.
    15. Etzkowitz, Henry & Leydesdorff, Loet, 2000. "The dynamics of innovation: from National Systems and "Mode 2" to a Triple Helix of university-industry-government relations," Research Policy, Elsevier, vol. 29(2), pages 109-123, February.
    16. Hagedoorn ,John & Narula ,Rajneesh, 1995. "Evolutionary understanding of corporate foreign investment behaviour : US foreign direct investment in Europe," Research Memorandum 001, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    17. Fagerberg, Jan, 1994. "Technology and International Differences in Growth Rates," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1147-1175, September.
    18. James, M.J. & Romijn, H.A., 1997. "The determinants of technological capability : a cross-country analysis," Other publications TiSEM 26bd52b0-8e74-4556-bff7-a, Tilburg University, School of Economics and Management.
    19. Jeffrey James & Henny Romijn, 1997. "The determinants of technological capability: A cross-country analysis," Oxford Development Studies, Taylor & Francis Journals, vol. 25(2), pages 189-207.
    20. Anthony Arundel & Aldo Geuna, 2001. "Does Proximity Matter for Knowledge Transfer from Public Institutes and Universities to Firms?," SPRU Working Paper Series 73, SPRU - Science Policy Research Unit, University of Sussex Business School.
    21. Glass, Amy Jocelyn & Saggi, Kamal, 1998. "International technology transfer and the technology gap," Journal of Development Economics, Elsevier, vol. 55(2), pages 369-398, April.
    22. Mr. Arvind Subramanian & Mr. Francesco Trebbi & Mr. Dani Rodrik, 2002. "Institutions Rule: The Primacy of Institutions over Integration and Geography in Economic Development," IMF Working Papers 2002/189, International Monetary Fund.
    23. Bon Ho Koo & Dwight H. Perkins (ed.), 1995. "Social Capability and Long-Term Economic Growth," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-13512-7, December.
    24. Martin Fransman, 1984. "Technological Capability in the Third World: An Overview and Introduction to some of the Issues raised in this Book," Palgrave Macmillan Books, in: Martin Fransman & Kenneth King (ed.), Technological Capability in the Third World, pages 3-30, Palgrave Macmillan.
    25. Ramos, Joseph, 2000. "Policy Directions for the New Economic Model in Latin America," World Development, Elsevier, vol. 28(9), pages 1703-1717, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lall, Sanjaya & Narula, Rajneesh, 2004. "FDI and its role in economic development: Do we need a new agenda?," Research Memorandum 019, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    2. Narula, Rajneesh. & Marín, Anabel., 2005. "Foreign direct investment spillovers, absorptive capacities and human capital development : evidence from Argentina," ILO Working Papers 993782123402676, International Labour Organization.
    3. repec:ilo:ilowps:378212 is not listed on IDEAS
    4. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    5. Narula, Rajneesh, 2002. "Switching from import substitution to the ‘New Economic Model’ in Latin America: A case of not learning from Asia," Research Memorandum 042, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    6. Costantini, Valeria & Liberati, Paolo, 2014. "Technology transfer, institutions and development," Technological Forecasting and Social Change, Elsevier, vol. 88(C), pages 26-48.
    7. Lorentzen, Jochen, 2005. "The absorptive capacities of South African automotive component suppliers," World Development, Elsevier, vol. 33(7), pages 1153-1182, July.
    8. Narula, Rajneesh, 2002. "The implications of growing cross-border interdependence for systems of innovation," Research Memorandum 019, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    9. Narula, Rajneesh & Marin, Anabel, 2003. "FDI spillovers, absorptive capacities and human capital development: evidence from Argentina," Research Memorandum 018, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    10. Alexis Habiyaremye, 2019. "Enhancing productive capabilities through intra-regional trade and cross-border investments in Southern Africa," Development Southern Africa, Taylor & Francis Journals, vol. 36(4), pages 409-425, July.
    11. Souzanchi Kashani, Ebrahim & Radosevic, Slavo & Kiamehr, Mehdi & Gholizadeh, Hossein, 2022. "The intellectual evolution of the technological catch-up literature: Bibliometric analysis," Research Policy, Elsevier, vol. 51(7).
    12. Habiyaremye, Alexis, 2005. "Dependence on Primary Commodities and Poverty Traps in Sub-Saharan Africa: Devising strategies and building capabilities for diversification," UNU-INTECH Discussion Paper Series 2005-09, United Nations University - INTECH.
    13. Rajneesh Narula, 2015. "The Importance of Domestic Capabilities for FDI-assisted Development: Lessons from Asia and Latin America," John H Dunning Centre for International Business Discussion Papers jhd-dp2015-05, Henley Business School, University of Reading.
    14. Richard Perkins & Eric Neumayer, 2009. "How do domestic attributes affect international spillovers of CO2-efficiency?," GRI Working Papers 8, Grantham Research Institute on Climate Change and the Environment.
    15. Ahmed, Elsadig Musa, 2012. "Are the FDI inflow spillover effects on Malaysia's economic growth input driven?," Economic Modelling, Elsevier, vol. 29(4), pages 1498-1504.
    16. Paola Criscuolo & Rajneesh Narula, 2008. "A novel approach to national technological accumulation and absorptive capacity: aggregating Cohen and Levinthal," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(1), pages 56-73.
    17. Dominguez Lacasa, Iciar & Jindra, Björn & Radosevic, Slavo & Shubbak, Mahmood, 2019. "Paths of technology upgrading in the BRICS economies," Research Policy, Elsevier, vol. 48(1), pages 262-280.
    18. Narula, Rajneesh & Portelli, Brian, 2004. "Foreign direct investment and economic development: Opportunities and limitations from a developing country perspective," Research Memorandum 009, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    19. Anzolin, Guendalina & Andreoni, Antonio & Zanfei, Antonello, 2022. "What is driving robotisation in the automotive value chain? Empirical evidence on the role of FDIs and domestic capabilities in technology adoption," Technovation, Elsevier, vol. 115(C).
    20. Vivarelli, Marco, 2014. "Structural Change and Innovation as Exit Strategies from the Middle Income Trap," IZA Discussion Papers 8148, Institute of Labor Economics (IZA).
    21. Khan, Muhammad Salar, 2022. "Absorptive capacities and economic growth in low- and middle-income economies," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 156-188.

    More about this item

    Keywords

    economics of technology ;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unm:umamer:2004004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Leonne Portz (email available below). General contact details of provider: https://edirc.repec.org/data/meritnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.