Disentangling the Innovation - Internalization Process Through a Structural Equation Model
Innovation virtuously impacts on the degree of international growth, which in turn positively influences innovation activities and then firmsÃ¯Â¿Â½Ã¢â€žÂ¢ performance (Filipescu et al., 2009). Many authors have tried to identify and explain the relationship between these two phenomena at firm level. Only recently, few empirical studies investigate them at a more aggregate level (see e.g. Mariotti et al., 2008). Moreover the literature focuses only on one direction of causality, while scant attention has been paid to inspect empirically innovation and internationalization together (Kafouros et al., 2008; Filippetti et al., 2009; Frenz and Ietto-Gillies, 2007). This paper provides an empirical analysis of the mutual relationship of these two phenomena, taking into account various features of the regions themselves. The empirical study is conducted on data concerning 20 Italian regions covering the period 2000-2008. To better understand the complex relationship between internationalization and innovation, we refer to the Structural Equation Models (SEM). These are multivariate regression type models, in which response variables could in turn act as dependent and predictor within a system of equations, and all variables are assumed to influence one-another reciprocally, either directly or through other variables as intermediaries (Bollen, 1989; McAdam et al., 2010). Through the SEM the relationships are expressed by a set of parameters which explain the magnitude of the effect (direct or indirect) between independent (either observed or latent) and dependent variables. Indeed, internationalization and innovation could act as both dependent and predictor which measurement could be difficult then suggesting the use of latent variables, and where the system of indicators is complex enough to lead at a model specified through two-way relations intrinsically connected. Using SEM approach we are able to specify flexible models dealing with non-standard relations stylized along panel data structure, in which spatial and temporal dimensions do matter
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Varouj A. Aivazian & Eric Santor, 2008. "Financial constraints and investment: assessing the impact of a World Bank credit program on small and medium enterprises in Sri Lanka," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 475-500, May.
- Mike Wright & Paul Westhead & Deniz Ucbasaran, 2007. "Internationalization of Small and Medium-sized Enterprises (SMEs) and International Entrepreneurship: A Critique and Policy Implications," Regional Studies, Taylor & Francis Journals, vol. 41(7), pages 1013-1030.
- Todd M. Gabe & David S. Kraybill, 2002. "The Effect of State Economic Development Incentives on Employment Growth of Establishments," Journal of Regional Science, Wiley Blackwell, vol. 42(4), pages 703-730.
- David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages 134-161, 02.
- Richard Harris & Mary Trainor, 2005. "Capital Subsidies and their Impact on Total Factor Productivity: Firm-Level Evidence from Northern Ireland," Journal of Regional Science, Wiley Blackwell, vol. 45(1), pages 49-74.
- Raffaele Paci & Stefano Usai, 1998.
"Technological enclaves and industrial districts: An analysis of the regional distribution of innovative activity in Europe,"
ERSA conference papers
ersa98p461, European Regional Science Association.
- Raffaele Paci & Stefano Usai, 2000. "Technological Enclaves and Industrial Districts: An Analysis of the Regional Distribution of Innovative Activity in Europe," Regional Studies, Taylor & Francis Journals, vol. 34(2), pages 97-114.
- R. Paci & S. Usai, 1997. "Technological enclaves and industrial districts. An analysis of the regional distributions of innovative activity in Europe," Working Paper CRENoS 199708, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- Andrew B. Bernard & J. Bradford Jensen, 2004.
"Why Some Firms Export,"
The Review of Economics and Statistics,
MIT Press, vol. 86(2), pages 561-569, May.
- Sergio Mariotti & Marco Mutinelli & Lucia Piscitello, 2008. "The Internationalization of Production by Italian Industrial Districts' Firms: Structural and Behavioural Determinants," Regional Studies, Taylor & Francis Journals, vol. 42(5), pages 719-735.
- Wilkinson, Timothy J. & Brouthers, Lance Eliot, 2000. "An Evaluation of State Sponsored Promotion Programs," Journal of Business Research, Elsevier, vol. 47(3), pages 229-236, March.
- De Maeseneire, W. & Claeys, T., 2007. "SMES, FDI and financial constraints," Vlerick Leuven Gent Management School Working Paper Series 2007-25, Vlerick Leuven Gent Management School.
- Benjamin Russo, 2004. "A cost-benefit analysis of R&D tax incentives," Canadian Journal of Economics, Canadian Economics Association, vol. 37(2), pages 313-335, May.
- Masaaki Kotabe & Srini S Srinivasan & Preet S Aulakh, 2002. "Multinationality and Firm Performance: The Moderating Role of R&D and Marketing Capabilities," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(1), pages 79-97, March.
- Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.
- Lydia Greunz, 2003. "The impact of industrial specialisation and diversity on innovation," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 46(3), pages 11-36.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa11p195. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)
If references are entirely missing, you can add them using this form.