Search results

We are interested in modeling the impact of spatial and interindustry dependence on firm-level innovation of Chinese firms The existence of network ties between cities imply that changes taking place in one city could influence innovation by firms in nearby cities (local spatial spillovers), or set in motion a series of spatial diffusion and feedback impacts across multiple cities (global spatial spillovers). We use the term local spatial spillovers to reflect a scenario where only immediately neighboring cities are impacted, whereas the term global spatial spillovers represent a situation where impacts fall on neighboring cities, as well as higher order neighbors (neighbors to the neighboring cities, neighbors to the neighbors of the neighbors, and so on). Global spatial spillovers also involve feedback impacts from neighboring cities, and imply the existence of a wider diffusion of impacts over space (higher order neighbors).

Similarly, the existence of national interindustry input-output ties implies that changes occurring in one industry could influence innovation by firms operating in directly related industries (local interindustry spillovers), or set in motion a series of in interindustry diffusion and feedback impacts across multiple industries (global interindustry spillovers).

Typical linear models of firm-level innovation based on knowledge production functions would rely on city- and industry-specific fixed effects to allow for differences in the level of innovation by firms located in different cities and operating in different industries. This approach however ignores the fact that, spatial dependence between cities and interindustry dependence arising from input-output relationships, may imply interaction, not simply heterogeneity across cities and industries.

We construct a Bayesian hierarchical model that allows for both city- and industry-level interaction (global spillovers) and subsumes other innovation scenarios such as: (1) heterogeneity that implies level differences (fixed effects) and (2) contextual effects that imply local spillovers as special cases.

Purpose – This chapter aims at investigating the impact of cross-border knowledge spillovers on technological innovation in the renewable energy sector.

Methodology/approach – The analysis presented in the chapter assumes that technological knowledge exhibits several tacit elements and requires established connections to flow between countries. A new measure for knowledge spillovers is obtained by weighting international R&D stocks through bilateral trade flows. The country-level patenting activity is modelled through a knowledge production function. The sample includes 18 OECD countries over the 1990–2006 period. Estimates are obtained through panel data techniques.

Findings – Our econometric results show that international knowledge developed by other countries has positive effects on the focal country's innovation in renewable energy technologies. Cross-country linkages, rather than mere geographic proximity, are found to favour cross-country knowledge spillovers.

Impact – The research contributes to the design of energy innovation policies. Public R&D is confirmed to be a relevant input to energy innovation. Coordination between countries in energy R&D activities can be required, particularly when countries maintain mutual linkages.

Originality – This study adds empirical evidence on the effect of cross-country knowledge spillovers and on the channels through which technological knowledge diffuses globally. It contributes to the emerging empirical research on energy innovation.

Firms are increasingly organizing cross-regional R&D collaborations among different units. Such collaborations should promote knowledge flows across distance and bring new knowledge to the local communities. However, the nature of cross-regional collaborations varies widely depending on the organizations within which they are organized. Compared with collaborations within small firms, collaborations in large firms tend to be routinized, which reduces the need for interpersonal interactions and increases the dependence on organizational structure. As a result, additional spillover from cross-regional collaboration is likely to be lower if the collaboration is within large firms. We extend this argument to the regional level and hypothesize that regions with a higher level of cross-regional collaborations tend to generate more valuable technologies, but when large firms dominate the formation of such collaborations, the marginal benefits of cross-regional collaboration are significantly reduced. Using a data set from the pharmaceutical industry between 1975 and 2001, we find support for our hypotheses. We conduct a series of robustness tests to check the consistency of our results.

The European Union’s Digital Markets Act (DMA) calls for far-reaching changes to the way economic activity will occur in EU digital markets. Before its remedies are imposed, it is critical to assess their impacts on individual markets, the digital sector, and the overall European economy. The European Commission (EC) released an Impact Assessment in support of the DMA that purports to evaluate it using cost/benefit analysis.

An economic evaluation of the DMA should consider its full impacts on dynamic competition. The Impact Assessment neither assesses the DMA's impact on dynamic competition in the digital economy nor evaluates the impacts of specific DMA prohibitions and obligations. Instead, it considers benefits in general and largely ignores costs. We study its benefit assessments and find they are based on highly inappropriate methodologies and assumptions. A cost/benefit study using inappropriate methodologies and largely ignoring costs cannot provide a sound policy assessment.

Instead of promoting dynamic competition between platforms, the DMA will likely reinforce existing market structures, ossify market boundaries, and stunt European innovation. The DMA is likely to chill R&D by encouraging free riding on the investments of others, which discourages making those investments. Avoiding harm to innovation is critical because innovation delivers large, positive spillover benefits, driving increases in productivity, employment, wages, and prosperity.

The DMA prioritizes static over dynamic competition, with the potential to harm the European economy. Given this, the Impact Assessment does not demonstrate that the DMA will be beneficial overall, and its implementation must be carefully tailored to alleviate or lessen its potential to harm Europe’s economic performance.

Purpose – The purpose of the chapter is to sketch the historical and evolutionary development of the Wichita Aircraft Manufacturing Cluster from inception to present and provide a descriptive narrative of aircraft industry knowledge spillovers currently driving effort to establish a Medical Device Manufacturing Cluster. The chapter illustrates how carbon-fiber composite materials knowledge and technology developed for use in the aviation industry is facilitating the creation and growth of medical device manufacturing.

Methodology/approach – We use an historical case study approach to trace the development of the aircraft cluster in the Wichita, KS metropolitan area. A number of technologies are identified that had initially been adopted by one firm but eventually diffused through other firms in the local cluster and ultimately throughout the industry.

Findings – In addition to providing examples of within industry knowledge spillovers, we provide an example of technology-based knowledge that is diffusing through the aircraft manufacturing industry and is now being used as the basis for establishing an unrelated industry manufacturing cluster. The use of carbon-fiber composites in aircraft manufacturing has diffused from one manufacturer to many in the industry. Subsequently, the knowledge base surrounding carbon-fiber composite materials is being used in a local R&D effort to create a second manufacturing cluster producing medical devices ranging from surgical instruments to joint-replacement implants.

Originality/value of paper – The chapter illustrates a unique example of a manufacturing cluster, intra-industry knowledge spillovers, and inter-industry knowledge spillovers to create a new manufacturing cluster.

Amid the COVID-19 world pandemic, there are few organizations that have proven to be recession proof. A Dubai-based company has managed to resist its second recession after the 2008 market downturn, with no lay-offs, cash flow problems, and over 80% customer satisfaction. NAFFCO, a world leader in manufacturing fire safety and security solutions, is the organization that beat the odds. The aim of this case study is to identify the drivers of success that contributed to the continuous growth of the organization, despite turbulences in the market condition. Six drivers were identified: (1) Situational Leadership Style, (2) Innovation through Kaizen, (3) Quality Focus, (4) Research and Development Philosophy with Knowledge Spillover Integration, (5) Esprit de corps, and finally (6) Corporate Citizenship. These drivers were cross-examined with respect to academic literature and an analysis of the deviations and commonalities have been presented. Based on the cross examination of different strategic drivers, suitable areas of future studies have been indicated to understand the magnitude of their effects including NAFFCO’s Oath!

This chapter analyzes the indirect effects of environmental management system (EMS) implementation and its certification and relates these to international governance in the context of new public environmental management. Building on a comprehensive quantitative dataset, it assesses the effects of ISO 14001 and EMAS (Eco-Management and Auditing Scheme) certification as well as temporal experience with EMS implementation on organizational activities outside the scope of EMS, while taking into account embeddedness and interaction effects. The analysis reveals heterogeneous effects, with limited evidence of embeddedness and interaction effects. As well, no influences of national business systems can be identified. Implications for the role of national governments in implementing sustainability strategies, even beyond environmental management, and aspects of standard flexibility in the process of governing firms to implementing such strategies in an international context are discussed.

Economic clusters are global centers of excellence in particular industries or technologies. They consist of interlinked companies, specialized suppliers, support services, and relevant institutional actors in a specific field. Multinational enterprise (MNE) R&D strategy with regard to economic clusters is impacted by two contradictory forces. MNEs locating their R&D activities within economic clusters can benefit by availing of specialized resources and by capturing location-specific tacit knowledge. However, the risks of knowledge leakage can lead to adverse selection whereby clusters attract underperforming firms that have much to gain and little to lose. Further, general disagreement exists on the measurement of performance within economic clusters. We review the literature, assess the evidence, and suggest areas for productive future research.