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The coevolution of industries and national institutions: Theory and evidence


  • Murmann, J. Peter


A survey across space and time reveals that leading firms operating in global industries often cluster in one or a few countries. The paper argues that nations differ in how successful they are in a particular industry because coevolutionary processes linking a particular industry and national institutions powerfully shape the path of an industry.s development. Across a wide range of contexts, scientific progress and industrial leadership reinforce each other in spirals of cumulative national advantage. A historical case study of synthetic dyes from 1857 to 1914 provides a dramatic example of how these positive feedback processes gave German organic chemistry and German dye firms a dominant position in the world. Over time, the relative strength of a nation in a particular industry and the capability of the country in a relevant scientific or engineering discipline display a strong positive correlation. Additional shorter case studies of agriculture, packaged software, and biotechnology support this induced hypothesis. We argue that the exchange of personnel between industry and academic institutions, the formation of commercial ties between them, lobbying on each other.s behalf and direct support from state agencies constitute causal mechanisms that can explain why successful firms often cluster in particular countries.

Suggested Citation

  • Murmann, J. Peter, 2002. "The coevolution of industries and national institutions: Theory and evidence," Discussion Papers, various Research Units FS IV 02-14, Social Science Research Center Berlin (WZB).
  • Handle: RePEc:zbw:wzbdiv:fsiv0214

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    References listed on IDEAS

    1. Richard N. Langlois & David C. Mowery, 1995. "The Federal Government Role in the Development of the American Software Industry: An Assessment," Industrial Organization 9503001, EconWPA.
    2. Olmstead, Alan L., 1999. "Biological Innovation And American Agricultural Development," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 124504, Australian Agricultural and Resource Economics Society.
    3. Julia Porter Liebeskind & Amalya Lumerman Oliver & Lynne Zucker & Marilynn Brewer, 1996. "Social networks, Learning, and Flexibility: Sourcing Scientific Knowledge in New Biotechnology Firms," Organization Science, INFORMS, vol. 7(4), pages 428-443, August.
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    Cited by:

    1. Dutrénit, gabriela & Capdevielle, Mario & Corona, Juan Manuel & Puchet, Martin & Santiago, Fernando & Vera-Cruz, Alexandre, 2010. "El sistema nacional de innovación mexicano: estructuras, políticas, desempeño y desafíos
      [The Mexican national innovation system: structures, policies, performance and challenges]
      ," MPRA Paper 31982, University Library of Munich, Germany.
    2. Gabriela Dutrénit & Juan Carlos Moreno-Brid & Martín Puchet & Eduardo Moreno, 2014. "Economic growth, innovation and inequality in Latin America: improvements, setbacks and pending issues post-Washington Consensus," Chapters,in: National Innovation Systems, Social Inclusion and Development, chapter 11, pages 304-348 Edward Elgar Publishing.
    3. Gil Avnimelech & Morris Teubal, 2010. "The Co-evolution of ICT, VC and Policy in Israel During the 1990s," Chapters,in: Emerging Clusters, chapter 6 Edward Elgar Publishing.
    4. Gabriela Dutrénit & Martín Puchet Anyul & Luis Sanz-Menendez & Morris Teubal & Alexandre O. Vera-Cruz, 2008. "A policy model to foster coevolutionary processes of science, technology and innovation: the Mexican case," Globelics Working Paper Series 2008-03, Globelics - Global Network for Economics of Learning, Innovation, and Competence Building Systems, Aalborg University, Department of Business and Management.
    5. repec:spr:manint:v:50:y:2010:i:3:d:10.1007_s11575-010-0035-2 is not listed on IDEAS
    6. Sotarauta, Markku & Srinivas, Smita, 2006. "Co-evolutionary policy processes: Understanding innovative economies and future resilience," MPRA Paper 52689, University Library of Munich, Germany.
    7. Mendona, Sandro, 2009. "Brave old world: Accounting for 'high-tech' knowledge in 'low-tech' industries," Research Policy, Elsevier, vol. 38(3), pages 470-482, April.
    8. Gabriela Dutrénit & Morris Teubal, 2011. "Coevolution, Emergence and Economic Development: Some Lessons from the Israeli and Mexican Experience," Chapters,in: Handbook on the Economic Complexity of Technological Change, chapter 18 Edward Elgar Publishing.

    More about this item


    Industry evolution; national institution; science-industry interface;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General


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