IDEAS home Printed from https://ideas.repec.org/p/unm/unumer/2011043.html
   My bibliography  Save this paper

Innovation performance and embeddedness in networks: evidence from the Ethiopian footwear cluster

Author

Listed:
  • Gebreeyesus, Mulu

    (UNU-MERIT)

  • Mohnen, Pierre

    (UNU-MERIT, Maastricht University)

Abstract

This study focuses on innovation in a cluster of informal shoemaking firms in Ethiopia - namely the Mercato footwear cluster. It examines how differently those firms are embedded in networks and how heterogeneous they are in absorptive capacity, and how this heterogeneity affects their innovation performance. Business interactions with buyers, suppliers and other producers are the major channels through which knowledge flows into the cluster. These business networks are mainly built on trust and long-term relationships and tend to be selective. The study reveals that despite homogeneity in social background the firms in the cluster behave and perform differently. Based on econometric analysis we document a positive and strong effect of local network position and absorptive capacity on innovation performance.

Suggested Citation

  • Gebreeyesus, Mulu & Mohnen, Pierre, 2011. "Innovation performance and embeddedness in networks: evidence from the Ethiopian footwear cluster," MERIT Working Papers 2011-043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2011043
    as

    Download full text from publisher

    File URL: https://www.merit.unu.edu/publications/wppdf/2011/wp2011-043.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ganeshan Wignaraja, 2002. "Firm Size, Technological Capabilities and Market-oriented Policies in Mauritius," Oxford Development Studies, Taylor & Francis Journals, vol. 30(1), pages 87-104.
    2. Tetsushi Sonobe & John E. Akoten & Keijiro Otsuka, 2009. "An Exploration into the Successful Development of the Leather‐Shoe Industry in Ethiopia," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 719-736, November.
    3. Lazerson, Mark H & Lorenzoni, Gianni, 1999. "The Firms That Feed Industrial Districts: A Return to the Italian," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 8(2), pages 235-266, June.
    4. Mairesse, Jacques & Mohnen, Pierre, 2010. "Using Innovation Surveys for Econometric Analysis," 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 1129-1155, Elsevier.
    5. Simon Rodan & Charles Galunic, 2004. "More than network structure: how knowledge heterogeneity influences managerial performance and innovativeness," Strategic Management Journal, Wiley Blackwell, vol. 25(6), pages 541-562, June.
    6. Bill McEvily & Akbar Zaheer, 1999. "Bridging ties: a source of firm heterogeneity in competitive capabilities," Strategic Management Journal, Wiley Blackwell, vol. 20(12), pages 1133-1156, December.
    7. Roberta Capello & Alessandra Faggian, 2005. "Collective Learning and Relational Capital in Local Innovation Processes," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 75-87.
    8. Roberta Rabellotti, 1997. "External Economies and Cooperation in Industrial Districts," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-25794-2, December.
    9. Ash Amin & Patrick Cohendet, 2004. "Architectures of knowledge : Firms, capabilities, and communities," Post-Print hal-00279605, HAL.
    10. Giuliani, Elisa & Bell, Martin, 2005. "The micro-determinants of meso-level learning and innovation: evidence from a Chilean wine cluster," Research Policy, Elsevier, vol. 34(1), pages 47-68, February.
    11. Elisa Giuliani, 2007. "The selective nature of knowledge networks in clusters: evidence from the wine industry," Journal of Economic Geography, Oxford University Press, vol. 7(2), pages 139-168, March.
    12. Maskell, Peter & Malmberg, Anders, 1999. "Localised Learning and Industrial Competitiveness," Cambridge Journal of Economics, Oxford University Press, vol. 23(2), pages 167-185, March.
    13. Mourad Dakhli & Dirk De Clercq, 2004. "Human capital, social capital, and innovation: a multi-country study," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 16(2), pages 107-128, March.
    14. Mccormick, Dorothy, 1999. "African Enterprise Clusters and Industrialization: Theory and Reality," World Development, Elsevier, vol. 27(9), pages 1531-1551, September.
    15. Elisa Giuliani, 2007. "Networks and Heterogeneous Performance of Cluster Firms," Chapters, in: Koen Frenken (ed.), Applied Evolutionary Economics and Economic Geography, chapter 8, Edward Elgar Publishing.
    16. Geoffrey G. Bell, 2005. "Clusters, networks, and firm innovativeness," Strategic Management Journal, Wiley Blackwell, vol. 26(3), pages 287-295, March.
    17. Schmitz, Hubert, 1999. "Global Competition and Local Cooperation: Success and Failure in the Sinos Valley, Brazil," World Development, Elsevier, vol. 27(9), pages 1627-1650, September.
    18. Ron Boschma & Anne L. J. ter Wal, 2007. "Knowledge Networks and Innovative Performance in an Industrial District: The Case of a Footwear District in the South of Italy," Industry and Innovation, Taylor & Francis Journals, vol. 14(2), pages 177-199.
    19. Roberta Rabellotti, 1997. "External Economies and Cooperation in Italy and Mexico," Palgrave Macmillan Books, in: External Economies and Cooperation in Industrial Districts, chapter 7, pages 133-165, Palgrave Macmillan.
    20. Sonali Deraniyagala & Haji H. H. Semboja, 1999. "Trade Liberalization, Firm Performance and Technology Upgrading in Tanzania," Palgrave Macmillan Books, in: Sanjaya Lall (ed.), The Technological Response to Import Liberalization in SubSaharan Africa, chapter 4, pages 112-147, Palgrave Macmillan.
    21. Roberta Rabellotti & Hubert Schmitz, 1999. "The Internal Heterogeneity of Industrial Districts in Italy, Brazil and Mexico," Regional Studies, Taylor & Francis Journals, vol. 33(2), pages 97-108.
    22. W. Gibb Dyer Jr. & Wendy Handler, 1994. "Entrepreneurship and Family Business: Exploring the Connections," Entrepreneurship Theory and Practice, , vol. 19(1), pages 71-83, October.
    23. Mengistae, Taye, 2001. "Indigenous ethnicity and entrepreneurial success in Africa : some evidence from Ethiopia," Policy Research Working Paper Series 2534, The World Bank.
    24. Lynn Mytelka, 2000. "Local Systems Of Innovation In A Globalized World Economy," Industry and Innovation, Taylor & Francis Journals, vol. 7(1), pages 15-32.
    25. Akbar Zaheer & Geoffrey G. Bell, 2005. "Benefiting from network position: firm capabilities, structural holes, and performance," Strategic Management Journal, Wiley Blackwell, vol. 26(9), pages 809-825, September.
    26. Andrews,Donald W. K. & Stock,James H. (ed.), 2005. "Identification and Inference for Econometric Models," Cambridge Books, Cambridge University Press, number 9780521844413.
    27. Bell, Martin & Albu, Michael, 1999. "Knowledge Systems and Technological Dynamism in Industrial Clusters in Developing Countries," World Development, Elsevier, vol. 27(9), pages 1715-1734, September.
    28. Marcel Fafchamps, 2002. "Returns to social network capital among traders," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 173-206, April.
    29. Andrea Morrison, 2008. "Gatekeepers of Knowledge within Industrial Districts: Who They Are, How They Interact," Regional Studies, Taylor & Francis Journals, vol. 42(6), pages 817-835.
    30. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
    31. Schmitz, Hubert & Nadvi, Khalid, 1999. "Clustering and Industrialization: Introduction," World Development, Elsevier, vol. 27(9), pages 1503-1514, September.
    32. von Hippel, Eric & Tyre, Marcie J., 1995. "How learning by doing is done: problem identification in novel process equipment," Research Policy, Elsevier, vol. 24(1), pages 1-12, January.
    33. Meine Pieter Van Dijk & Árni Sverrisson, 2003. "Enterprise clusters in developing countries: mechanisms of transition and stagnation," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 15(3), pages 183-206, July.
    34. Ann Markusen, 1996. "Sticky Places in Slippery Space: A Typology of Industrial Districts," Economic Geography, Taylor & Francis Journals, vol. 72(3), pages 293-313, July.
    35. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-1171, September.
    36. Leon Oerlemans & Marius Meeus, 2005. "Do Organizational and Spatial Proximity Impact on Firm Performance?," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 89-104.
    37. Elisa Giuliani, 2005. "The Structure of Cluster Knowledge Networks Uneven, not Pervasive and Collective," DRUID Working Papers 05-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    38. Arshad M. Khan & V. Manopichetwattana, 1989. "Innovative and Noninnovative Small Firms: Types and Characteristics," Management Science, INFORMS, vol. 35(5), pages 597-606, May.
    39. David Roodman, 2009. "Mixed-process models with cmp," DC09 Stata Conference 11, Stata Users Group.
    40. Gebreeyesus, Mulu, 2009. "Innovation and Microenterprises Growth in Ethiopia," MERIT Working Papers 2009-053, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    41. Visser, Evert-jan, 1999. "A Comparison of Clustered and Dispersed Firms in the Small-Scale Clothing Industry of Lima," World Development, Elsevier, vol. 27(9), pages 1553-1570, September.
    42. Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
    43. Jason Owen-Smith & Walter W. Powell, 2004. "Knowledge Networks as Channels and Conduits: The Effects of Spillovers in the Boston Biotechnology Community," Organization Science, INFORMS, vol. 15(1), pages 5-21, February.
    44. David Roodman, 2009. "Estimating Fully Observed Recursive Mixed-Process Models with cmp," Working Papers 168, Center for Global Development.
    45. Mario Cimoli & André A. Hofman & Nanno Mulder (ed.), 2010. "Innovation and Economic Development," Books, Edward Elgar Publishing, number 13996.
    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. Gloria Parra‐Requena & Francesc Xavier Molina‐Morales & Pedro Manuel García‐Villaverde, 2010. "The Mediating Effect of Cognitive Social Capital on Knowledge Acquisition in Clustered Firms," Growth and Change, Wiley Blackwell, vol. 41(1), pages 59-84, March.
    2. Hervas Oliver,Jose Luis & Gonzalez,Gregorio & Caja,Pedro, 2014. "Clusters and industrial districts: where is the literature going? Identifying emerging sub-fields of research," INGENIO (CSIC-UPV) Working Paper Series 201409, INGENIO (CSIC-UPV).
    3. Pierre-Alexandre Balland & José Antonio Belso-Martínez & Andrea Morrison, 2014. "The Dynamics of Technical and Business Networks in Industrial Clusters: Embeddedness, status or proximity?," Papers in Evolutionary Economic Geography (PEEG) 1412, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Apr 2014.
    4. Eisingerich, Andreas B. & Bell, Simon J. & Tracey, Paul, 2010. "How can clusters sustain performance? The role of network strength, network openness, and environmental uncertainty," Research Policy, Elsevier, vol. 39(2), pages 239-253, March.
    5. Elisa Giuliani, 2008. "What drives innovative output in emerging clusters? Evidence from the wine industry," SPRU Working Paper Series 169, SPRU - Science Policy Research Unit, University of Sussex Business School.
    6. Expósito-Langa, Manuel & Molina-Morales, F. Xavier & Tomás-Miquel, José-Vicente, 2015. "How shared vision moderates the effects of absorptive capacity and networking on clustered firms’ innovation," Scandinavian Journal of Management, Elsevier, vol. 31(3), pages 293-302.
    7. Díez-Vial, Isabel & Montoro-Sánchez, Ángeles, 2016. "How knowledge links with universities may foster innovation: The case of a science park," Technovation, Elsevier, vol. 50, pages 41-52.
    8. Montoro-Sanchez, Angeles & Diez-Vial, Isabel & Belso-Martinez, Jose Antonio, 2018. "The evolution of the domestic network configuration as a driver of international relationships in SMEs," International Business Review, Elsevier, vol. 27(4), pages 727-736.
    9. Elisa Giuliani, 2010. "Clusters, Networks and Economic Development: An Evolutionary Economics Perspective," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 12, Edward Elgar Publishing.
    10. Giuliani, Elisa & Pietrobelli, Carlo & Rabellotti, Roberta, 2005. "Upgrading in Global Value Chains: Lessons from Latin American Clusters," World Development, Elsevier, vol. 33(4), pages 549-573, April.
    11. Cristina Boari & F. Xavier Molina-Morales & Luis Martínez-Cháfer, 2017. "Direct and Interactive Effects of Brokerage Roles on Innovation in Clustered Firms," Growth and Change, Wiley Blackwell, vol. 48(3), pages 336-358, September.
    12. Grillitsch, Markus, 2014. "Institutional Change and Economic Evolution in Regions," Papers in Innovation Studies 2014/1, Lund University, CIRCLE - Centre for Innovation Research.
    13. Fiorenza Belussi & Silvia R. Sedita, 2012. "Industrial Districts as Open Learning Systems: Combining Emergent and Deliberate Knowledge Structures," Regional Studies, Taylor & Francis Journals, vol. 46(2), pages 165-184, April.
    14. Markus Grillitsch, 2014. "Regional Transformation: Institutional Change and Economic Evolution in Regions," ERSA conference papers ersa14p1481, European Regional Science Association.
    15. Elisa Giuliani, 2004. "Laggard Clusters as Slow Learners, Emerging Clusters as Locus of Knowledge Cohesion (and Exclusion): A Comparative Study in the Wine Industry," LEM Papers Series 2004/09, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    16. José-Vicente Tomás-Miquel & Gabriel Brătucu & Manuel Expósito-Langa & Oana Bărbulescu, 2018. "The Relevance of Collaborative Networks in Emerging Clusters. The Case of Muntenia-Oltenia Regions in Romania," Sustainability, MDPI, vol. 10(7), pages 1-16, July.
    17. Kesidou, Effie & Romijn, Henny, 2008. "Do Local Knowledge Spillovers Matter for Development? An Empirical Study of Uruguay's Software Cluster," World Development, Elsevier, vol. 36(10), pages 2004-2028, October.
    18. Elisa Giuliani, 2005. "The Structure of Cluster Knowledge Networks Uneven, not Pervasive and Collective," DRUID Working Papers 05-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    19. Ekaterina Turkina & Ari Van Assche & Raja Kali, 2016. "Network Structure and Industrial Clustering Dynamics in the Aerospace Industry," CIRANO Working Papers 2016s-14, CIRANO.
    20. Sándor Juhász, 2021. "Spinoffs and tie formation in cluster knowledge networks," Small Business Economics, Springer, vol. 56(4), pages 1385-1404, April.

    More about this item

    Keywords

    industrial clusters; networks; innovation performance; informal sector; Africa; Ethiopia;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:unumer:2011043. 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: Ad Notten (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.