A multilevel growth assessment of the diffusion of management innovation nested in state levels: The case of US local economic development programs

Abstract

The practice of local public programs is an interesting topic for the study of the diffusion of management innovation. Based on previous research on the diffusion of innovative policy in state governments, this research employs a panel design to analyse the passage of management innovation related to local economic development programs. Panel data drawn from 1994, 1999, and 2004 USA International City/County Management Association (ICMA) surveys on economic developments of municipal and county governments were used. Using a multilevel growth curve model, the findings indicated that the diffusion of management innovation (e.g., adoption of economic development plans and performance measures) did not spread as expected between and within the localities sampled, even if management innovation has become a widespread practice in federal and state governments. However, our estimates found that the diffusion factors (e.g., internal determinants, learning, and competitiveness) contributed to the adoption of a performance measure and to an economic development plan to retain and attract local businesses and to drive economic growth. Using a panel design (rather than a cross-sectional study) to look at the changes of adoption of management innovation, this research examined the diffusion of policy innovations in local management. State factors are found to have an impact on local practices in the USA.