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

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  • 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 043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2011043
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    Cited by:

    1. Rajesh SN Raj & Kunal Sen, 2016. "Moving out of the bottom of the economy? Constraints to firm transition in the Indian informal manufacturing sector," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-20, December.
    2. repec:bla:rdevec:v:21:y:2017:i:4:p:1401-1424 is not listed on IDEAS
    3. Mekonnen, Tigist, 2017. "Financing rural households and its impact: Evidence from randomized field experiment data," MERIT Working Papers 009, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. repec:spr:scient:v:111:y:2017:i:2:d:10.1007_s11192-017-2320-3 is not listed on IDEAS
    5. Karla Paola Jiménez Almaguer. & José Melchor Medina Quintero. & Nazlhe Faride Cheín Schekaibán, 2013. "The search for the development of clusters in Tamaulipas, Mexico: A case study," Economía: teoría y práctica, Universidad Autónoma Metropolitana, México, vol. 39(2), pages 89-117, Julio-Dic.
    6. Ali, Merima & Godart, Olivier & Görg, Holger & Seric, Adnan, 2016. "Cluster development programs in Ethiopia: Evidence and policy implications," E-Books, Kiel Institute for the World Economy (IfW), number 141418, April.
    7. Joana Almodovar & Aurora A.C. Teixeira, 2014. "Assessing the Importance of Local Supporting Organizations in the Automotive Industry: A Hybrid Dynamic Framework of Innovation Networks," European Planning Studies, Taylor & Francis Journals, vol. 22(4), pages 841-865, April.
    8. Iizuka, Michiko, 2013. "Innovation systems framework: still useful in the new global context?," MERIT Working Papers 005, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Jiang Wei & Minfei Zhou & Mark Greeven & Hongyan Qu, 2016. "Economic governance, dual networks and innovative learning in five Chinese industrial clusters," Asia Pacific Journal of Management, Springer, vol. 33(4), pages 1037-1074, December.
    10. Szirmai A. & Gebreeyesus M. & Guadagno F. & Verspagen B., 2013. "Promoting productive employment in Sub‐Saharan Africa : a review of the literature," MERIT Working Papers 062, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Masaki Nakabayashi, 2017. "Honesty, Diligence and Skill: Risk Sharing and Specialization in the Kiryu Silk Weaving Cluster, Japan," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 1401-1424, November.
    12. Getahun, Tigabu Degu, 2016. "The Effect of Industrial Cluster Policy on Firm Performance in Ethiopia: Evidence from the Leather Footware Cluster," Discussion Papers 229713, University of Bonn, Center for Development Research (ZEF).
    13. Rehman, Naqeeb Ur, 2016. "Innovation Performance of Chilean SMEs: A Bivariate Probit Analysis," MPRA Paper 68827, University Library of Munich, Germany.

    More about this item

    Keywords

    industrial clusters; networks; innovation performance; informal sector; Africa; Ethiopia;

    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

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