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Empirical Analysis of Factors Promoting Product Innovation in ASEAN Economies: Focusing on Absorptive Capacity and ICT Use

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  • Idota, Hiroki
  • Bunno, Teruyuki
  • Ueki, Yasushi
  • Shinohara, Sobee

Abstract

In recent years, East Asian economies have been rapidly developing. The reason is that firms have been successfully achieving product and process innovation by introducing advanced technologies and know-how from MNCs. In order to enhance innovation, firms have to own technology, capability and ICT use. In particular, collaborations with outside organizations such as MNCs (Multi-national corporations), universities, public organizations, local firms are indispensable for firms in developing economies. Authors’ previous research clarified external linkages enhance innovation capability and ICT use, and innovation capability and ICT use promote product innovation in ASEAN firms. These studies analyzed under what conditions firms can promote absorptive capability if they had external linkages. Whether or how absorptive capacity affected innovation capability and ICT use were not explained there. Based on survey data from four ASEAN economies such as Indonesia, the Philippines, Thailand, and Vietnam, from 2013 to 2014, this study clarifies how absorptive capacity, ICTs, and innovation capability such as QC and cross-functional team enhance product innovation by using SEM (Structural equation modeling). As a result, the following causality from external linkages (origin) to innovation (final outcome) is demonstrated: (i) absorptive capacity is enhanced by external linkages such as local firms, public organizations, and universities; (ii) absorptive capacity enhances innovation capability; (iii) innovation capability enhances ICT use; and (iv) innovation capability and ICT use promote product innovation. These are similar to those of authors’ previous research. Since data are different, it is difficult to compare the results, but the robustness of the results is demonstrated.

Suggested Citation

  • Idota, Hiroki & Bunno, Teruyuki & Ueki, Yasushi & Shinohara, Sobee, 2015. "Empirical Analysis of Factors Promoting Product Innovation in ASEAN Economies: Focusing on Absorptive Capacity and ICT Use," 26th European Regional ITS Conference, Madrid 2015 127150, International Telecommunications Society (ITS).
  • Handle: RePEc:zbw:itse15:127150
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    References listed on IDEAS

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    1. Dieter Ernst, 2002. "Global production networks and the changing geography of innovation systems. Implications for developing countries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(6), pages 497-523.
    2. Martin Srholec, 2011. "A multilevel analysis of innovation in developing countries ," Industrial and Corporate Change, Oxford University Press, vol. 20(6), pages 1539-1569, December.
    3. Chen, Yongmin & Puttitanun, Thitima, 2005. "Intellectual property rights and innovation in developing countries," Journal of Development Economics, Elsevier, vol. 78(2), pages 474-493, December.
    4. Effie Kesidou & Adam Szirmai, 2008. "Local knowledge spillovers, innovation and export performance in developing countries: empirical evidence from the Uruguay software cluster," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 281-298.
    5. Pietrobelli, Carlo & Rabellotti, Roberta, 2011. "Global Value Chains Meet Innovation Systems: Are There Learning Opportunities for Developing Countries?," World Development, Elsevier, vol. 39(7), pages 1261-1269, July.
    6. Idota, Hiroki & Ueki, Yasushi & Bunno, Teruyuki & Shinohara, Sobee & Tsuji, Masatsugu, 2014. "Role of ICT in the innovation process based on firm-level evidence from four ASEAN economies: An SEM approach," 25th European Regional ITS Conference, Brussels 2014 101397, International Telecommunications Society (ITS).
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    Keywords

    ICT use; absorptive capacity; external linkages; product innovation; SEM (Structural equation modeling);

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