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The purpose of this paper is to investigate the determinants of R&D investment at the level of the firm.

A balanced panel of 215 Italian manufacturing firms over the 1995‐2000 period has been used to test the technology‐push, the demand‐pull and the endogenous skill‐bias hypotheses. Econometrically, both the GMM‐SYS estimator and the Least Squares Dummy Variable Corrected (LSDVC) estimator (a recently‐proposed panel data technique particularly suitable for small samples) have been used.

Results support the well‐established technology‐push and demand‐pull hypotheses and, furthermore, supply evidence for the role of skill endowment in increasing a firm's R&D investments.

A limitation of the study concerns the measure of skills which is here, as in previous economic literature, simply the ratio between productive (blue‐collar) and non‐productive (white‐collar) workers. Another limitation of this contribution concerns its limited generalisability: data come from relatively large Italian manufacturing firms, i.e. the service sector and SMEs are not considered.

Consistently with the related managerial and economic literature, the basic result is that current skill endowment may significantly and positively influence a firm's current R&D decision; therefore, adequate education and training policies may indirectly induce an increase in corporate R&D investment. In terms of managerial implications, this means that HRM may be seen as an indirect strategy for improving a firm's R&D effort and ultimately for improving its performance through innovation.

While there is a well‐established literature investigating the so‐called Skill Biased Technological Change, few microeconomic empirical studies have been devoted to test the reverse relationship. The paper aims to fill this gap, testing whether higher skills may induce higher R&D expenditures.

The purpose of this paper is to begin to develop a theoretical position for understanding the role of services in innovation in post‐industrial societies.

This study develops an evolutionary and institutional approach to understanding the role of certain specialist services in innovation and illustrate how significant they are for the economies of large metropolitan areas in England and Germany.

The paper argues that the role of knowledge intensive business services (KIBS) in innovation may be understood theoretically in terms of evolutionary and institutional economics. From this perspective is is argued that urban economies are path dependent interactive learning systems that develop individually through time. They are increasingly characterized by networked production systems in which KIBS play a key role in the transfer of bespoke knowledge between actors both within and from outside individual cities. As a result the authors argue that KIBS make a significant and place specific contribution to innovation in the cities where they are located.

The paper suggests a systematic theoretical approach to understanding the currently under‐theorized role of services in general and KIBS in particular in innovation. It also points to the importance of the geography of specialized services.

Makes the case that the classical theory of production, as developed primarily by Adam Smith, should be seen as a precursor of the modern capabilities view of the firm (Penrose, Richardson, Nelson and Winter, Teece, Langlois and others). Furthermore, based on an empiricist epistemology, Smith developed ideas that are close to modern notions such as routines and bounded rationality. Shows that his emphasis on knowledge, specialization and learning is characteristic of the capabilities view, but not of the contractual view. Discusses the intellectual link from Smith to other classicals, such as Babbage and Marx, to Marshall and such post‐Marshallians as McGregor, Andrews, Downie, Penrose, and Richardson. Argues that the classical‐capabilities view of the firm can be seen as a theory of firm boundaries. States that the make‐or‐buy decision may in fact hinge on production‐cost considerations, contrary to the spirit of standard transaction‐cost economics.

The purpose of this paper is to seek to develop a rigorous analysis of social capabilities (SC) and measuring them in a special industrial cluster, considering the key role of knowledge and SC in innovation.

The paper sets off from the definition of SC and the elements that characterize them in an industrial cluster. The focus also examines how it is possible to measure SC within a specific area, using the scoreboard approach. The empirical aspect remains based upon the original results of surveys conducted on a sample of entrepreneurs specializing in a special industrial cluster utilizing a multi-method approach and the paper presents the empirical analysis estimating an innovation equation.

The results of the case study show that the relationship between SC and innovation does not only involve large enterprises but small- and medium-sized businesses as well.

Measuring SC is very complex since not all the highlighted determinants can be subject to empirical verification and given that they are intangible elements, residual and often incorporated into tacit knowledge and a literature that can help us in defining and measuring them accurately is not always available for all the indicators. In this research the author proposes a measure of SC using a composite indicator and investigates the effective role of these inputs in stimulating innovative activity in an industrial cluster performance.

The purpose of this paper is to analyze how path dependence in the evolution of major theories of foreign direct investment (FDI) locked in a theoretical perspective of the multinational enterprise that focused on asset-exploitation. This perspective is challenged by recent contradicting observations of multinationals from China and other emerging economies. A decisive re-orientation of FDI theory is proposed as a way forward to resolve this tension.

Placing FDI theories into the context of FDI patterns prevailing at the time they were developed, Thomas Kuhn’s framework on the evolution of scientific knowledge is employed to track how the mainstream FDI theory emerged, went through a period of normal science and then approached a crisis of science in this field.

The evolution of FDI theory is strongly path-dependent, which made it difficult for theory to effectively incorporate new conceptual discoveries and empirical findings about the nature of FDI activity.

FDI theory would benefit from a full re-orientation to a demand-oriented perspective which places the pursuit of advantages, assets, resources, etc., at the core of the theory. Such a change is implicit in many recent theoretical advances and would assure theory is generalizable to all types of FDI.

This paper empirically investigates the processes by which manufacturing firms create radical innovations in their core production process, referred to as radical manufacturing technology innovations (RMTI). The purpose of this paper is to improve the understanding of the processes and practices manufacturing firms use to create RMTI.

Creation processes for 23 RMTI projects from diverse industry and technology contexts are explored. Data were collected via semi-structured interviews, and an inductive analysis was carried out to identify similarities and differences in RMTI types and creation processes.

Three types of RMTI and three alternative RMTI creation processes are revealed and characterized. An integrated view is developed of the activities of the equipment supplier and the manufacturing firm, highlighting their different roles and interaction across the three RMTI creation process types.

The exploratory design limits the depth of the analysis per RMTI project, and the focus is on manufacturing technology innovations in one country. The results extend previous case and context-specific findings on RMTI creation processes and provide novel frameworks for cross-case comparisons.

The manufacturing firms’ proactive role in RMTI creation is defined. A framework is proposed for using different RMTI creation processes for different types of RMTI.

This study addresses recent calls for empirical research on understanding the ways in which process innovations unfold in manufacturing firms. The findings emphasize the role of manufacturing firms as creators of RMTI in addition to their role as innovation adopters and implementers and reveal the suitability of different RMTI creation processes for different RMTI types.

Brazil’s telecommunications sector has been going through a process of privatization that will change conditions for information technologies (IT) diffusion among Brazilian firms. The impacts of privatization will be especially important to Brazilian firms that are still in the early stages of IT diffusion, such as small‐ and medium‐sized enterprises (SMEs). The aim of this paper is to discuss the impacts of privatization of telecommunications on IT diffusion among Brazilian SMEs. The paper will first analyze the factors that stimulate SMEs to adopt IT, such as the positive impacts on competitiveness. The paper will then describe how the changes that are taking place in the telecommunications sector can influence IT diffusion. In the third section, the paper will consider the case of Brazil, discussing the specificities of IT diffusion in SMEs from developing countries. As a conclusion the paper will discuss how policy measures can be taken so that Brazilian SMEs can benefit from the changes in the telecommunications sector.

The purpose of this paper is to examine various technological innovation influencers (TIIs) in small manufacturing firms. It introduces a study framework of technological innovation and evaluates the relevance of four TIIs to building and sustaining the competitiveness of Indian firms.

This research is based on an in-depth survey of 135 firms located in India’s Northern region. Multiple regression analysis was employed to examine the correlation between TIIs and manufacturing firm performance (MFP) for these firms.

The findings verify that entrepreneurial capability, technology infrastructure capability and government initiatives are the most important TIIs for small firms. The findings are also validated by using statistical t-test and canonical correlation analysis.

This study uses a single informant as the source of information on each firm. The study is limited to small-scale firms in the Northern region of India. Also, the study has been conducted excluding the service sector.

Recent studies have advocated various TIIs and discussed their impact on MFP. This paper examines the determinants of technological innovation in small manufacturing firms. It introduces a study framework of technological innovation and examines the relevance of four TIIs to building and sustaining the competitiveness of Indian firms.

This paper seeks to explore the implementation of knowledge management in a telecommunication multinational subsidiary and to investigate factors that affect the performance as well as the impacts.

Innovation perspective informs the identification of the ways in which KM strategies are devised and put into action. Using in‐depth interviews and direct observation, the paper maps some problems associated with the strategy and implementation of KM.

The case shows that the lack of organisation‐wide integrated systems, which is typical across different organisations, does contribute to this problem. However, the main predicament lies with the fact that a KM‐enabling scheme is never explicitly prioritised in the organisation's information systems strategy.

KM implementation should take into account both technological innovation and organisational innovation. Neglecting one aspect poses apparent danger that the implementation is unlikely to bring about benefit to the organisation.

This paper presents the case of a multinational company subsidiary in a developing economy, i.e. Indonesia. It is expected that this case will help substantiate an instance of KM implementation in an emerging economy and latecomer development, which might impact the operation and working of a multinational subsidiary.

The purpose of this paper is to identify the different types of adoption costs faced by organizations involved in the adoption of radio frequency identification (RFID) within supply networks, and to understand how these potential costs affect the likelihood of RFID adoption.

The paper applies an existing generic theoretical framework of costs associated with process innovation adoption to the case of RFID technology. Data are collected by interviewing participants in the RFID adoption process in supply network settings, and by examining a range of publicly available information on RFID development. The data are used to test and expand the theoretical framework.

Of the six main categories of generic process innovation costs, four are identified as applicable in the case of RFID adoption by early adopters: development, switching, cost of capital and implementation. No evidence is found for initiation and relational costs. In addition, a seventh category of costs is identified as applicable to the adoption of RFID in supply networks: ethical costs associated with privacy and health issues.

Further empirical work is required to test the generalisability of the findings. Because RFID technology is still in the early phases of development, the research has been able to consider only early adopters: further work is required as the technology matures to assess the impact of costs throughout the technology development lifecycle.

The work demonstrates that when considering the adoption of RFID managers need to look at a range of potential costs in making the investment decision. Policy makers also need to consider how organizations consider a range of costs that may not be explicitly specified when making adoption decisions.

The paper tests and extends the generic framework of costs associated with process innovations in supply networks. The study also clarifies the various costs involved in the adoption of RFID technologies by early adopters, and their influence on the decision to adopt.