Interfirm Information Linkages in an Economically Disadvantaged Region: An Empirical Perspective from Metropolitan Buffalo

Abstract

The external information linkages of industrial firms in two sectors of Buffalo's manufacturing base—medical instruments, and chemicals—are examined. Survey data are presented which indicate a positive role for imported technical services in local product innovation, export activity, and technology diffusion. The data reveal that firms which import a substantial proportion of their external technical inputs hold a competitive advantage over their counterparts which depend solely on local suppliers. The data also reveal that larger manufacturers are more likely to import technical services than smaller firms. Evidence from the sample is then contrasted against recent empirical streams in the literature on producer services, regional growth, and industrial innovation. It is argued that urban centres with weak producer service endowment may in some instances import key inputs from other regions. On a more cautious note, it is suggested that this option may not be feasible for small manufacturers, many of which lack the in-house resources required for nonlocal information search. The paper concludes with a discussion of the extent to which interregional trade in producer services can act as an equalising force in regional innovation potential.