Knowledge Externalities Research Articles

The role of multiple ties in knowledge networks: Complementarity in the Montefalco wine cluster

After decades of studies about pervasive, wide, and inclusive knowledge externalities and the advantages of being there, recent literature on management, industrial marketing, economic geography, regional studies, and related fields has stressed that knowledge spreads imperfectly, unevenly, and selectively within regional and cluster contexts. In this respect, little is known about the role played by heterogeneous knowledge ties among the same set of actors and to what extent they follow overlapping or different routes of exchanging knowledge. Thus, an investigation of multiple knowledge networks in clusters is a fundamental approach to interpret the reasons for innovation and economic performance.With an original dataset comprised of data collected by surveys directly administered in local wineries in the Montefalco wine region of Italy, this paper aims to analyse the roles played by different local knowledge ties within a sector that is critically driven by the exchange of knowledge among economic actors. Social network analysis and exponential random graph modelling were applied to investigate the driving forces of the knowledge flows. The empirical results showed that economic and social ties positively affect the spread of knowledge, but the former has a higher magnitude impact than the latter. Moreover, they follow complementary routes of exchange rather than overlapping ones. We suggest that such a structure has implications for understanding the diffusion of knowledge and structures of innovation in cluster contexts.

How are the potential gains from economic activity transmitted to the labour factor: more employment or more wages? Evidence from the Portuguese context

AbstractThe paper analyses the role of knowledge externalities in firms' employment and workers' wages. We test whether agglomeration economies and regional knowledge base exert a greater impact on wage growth than on employment growth, using spatial panel econometric techniques to control for unobserved spatial effects. Using a spatial panel for six Portuguese manufacturing industries, we found that regional knowledge spillovers, contrary to the theoretical assumptions, have a greater impact on employment in firms than on workers' wages. This analysis might enhance important policy debates about the effects of regional policies on employment and wages.

The Knowledge Spillover Risks Management Framework for Collaborative Innovation

Knowledge spillover is a manifestation of knowledge externality, its negative impact on collaborative innovation can not be ignored. Designing independent variables based on defining the key impact factors of knowledge spillover risks, propose hypothesis of the relationship between independent variables and dependent variables, and then verify hypothesis, analysis the minimum value and stability of knowledge spillover risks. Finally, based on the analysis results, constructing management framework of knowledge spillover risks for collaborative innovation.

Spatial Distribution of Total Factor Productivity (TFP) in the EU Regional Scope

Purpose: The aim of the paper is to analyse the differences in the level of productivity among the EU regions illustrated by the spatial distribution of total factor productivity (TFP). Since the level of productivity has an important geographical component the answer to the question, which regions are characterised with high or low level of productivity is being undoubtedly of high political importance. Design/Methodology/Approach: To calculate TFP defined as the aggregated output-input ratio, we employ the multiplicatively-complete Fare-Primont index. This index satisfies all economically-relevant axioms and tests from index number theory. The research sample consists of 256 European Union (EU) regions at NUTS 2 level. Findings: The results of the study indicate that relatively high TFP values are observed in core Western European regions, while the bottom of the TFP distribution is dominated by regions in Bulgaria, Poland and Romania. This may suggest a polarised specialization of the EU regions and limited interregional diffusion of technological knowledge. Our findings also show a high degree of dispersion in TFP within countries. Practical Implications: Identification of the spatial distribution of Total Factor Productivity (TFP) across European regions has implication for the EU regional and innovation policies. Designing policies basing on smart specialization strategies, which foster linkages to release positive knowledge externalities both within as well as between regions, constitutes the desired strategic development aim to enhance the performance of TFP. In particular, these strategies are crucial for the regions characterized by low TFP levels. Originality/Value: The methodological approach followed in this paper, in contrast to most of the existing studies on productivity differences at the regional level, satisfies all economically-relevant axioms and tests from index number theory.

Environmental innovation, knowledge spillovers and policy implications: A systematic review of the economic effects literature

Abstract The economic impact of environmentally friendly innovations, and their knowledge externalities on productivity received an increasing attention from the research community. Although there are numerous studies focusing on this issue, to our knowledge, there is no systematic literature review so far able to provide a complete outlook on the state-of-the-art, and the directional change in the theoretical and empirical studies exploring the relationship between environmental spillover effects and firm productivity. In order to bridge this gap, the paper aims to identify empirical evidence concerning the public policy strategies introduced to support diffusion of environmentally friendly technologies. The findings of the undertaken systematic literature review reveal that innovative activity in environmental issues produces important knowledge spillovers. In the light of the findings, the study advocates that: (a) Public subsidies alone are not sufficient enough to deliver desired outcomes; (b) Implementation of a coherent policy mix is critical to achieve sustainable economic growth; (c) The policy mix should particularly contain a supportive cooperation strategy.

Evolution of Regional Innovation with Spatial Knowledge Spillovers: Convergence or Divergence?

This paper extends endogenous economic growth models to incorporate knowledge externality. We explore whether spatial knowledge spillovers among regions exist, whether spatial knowledge spillovers promote regional innovative activities, and whether external knowledge spillovers affect the evolution of regional innovations in the long run. We empirically verify the theoretical results through applying spatial statistics and econometric models in the analysis of panel data of 31 regions in China. An accurate estimate of the range of knowledge spillovers is achieved and the convergence of regional knowledge growth rate is found, with clear evidences that developing regions benefit more from external knowledge spillovers than developed regions.

Spinoffs and tie formation in cluster knowledge networks

It is generally acknowledged that in order to have access to locally accumulated industrial knowledge, firms have to collaborate and take part in cluster knowledge networks. This study argues that the inherited capabilities of spinoff enable them to cooperate and exchange knowledge more easily and to gain more from positive knowledge externalities in clusters. The basis of the analysis is a relational dataset on a printing and paper product cluster in Hungary, and I use exponential random graph models to explain the formation of knowledge ties. I demonstrate that besides geographical proximity, ownership similarity and network structural effects, being a spinoff company enhances tie formation in the local network. Results suggest that spinoffs are indeed more likely to collaborate and take advantage of knowledge concentration.

Combination of Complementary Technological Knowledge to Generate “Hard to Imitate” Technologies

Valuable technological knowledge attracts more imitations. In light of knowledge-level perspective, this study investigates how firms could generate rare and valuable knowledge that is also hard to imitate. By applying specialised complementary assets concept to the technological portfolio of a firm, we show that core and background technological knowledge from internal and external sources, respectively, are complementarily combined to create new technologies that delay inter-firm knowledge externalities and that generate significant intra-firm knowledge flows simultaneously. The results suggest that the combination of knowledge in certain technological categories would have significant appropriability benefits, allowing firms to generate valuable and hard to imitate technological knowledge. This finding contributes to knowledge management, patent economics, and appropriability literature. Managerial implications for knowledge management are also discussed.

Knowledge exhaustibility public support to business R&D and the additionality constraint

Recent advances of the economics of knowledge about the properties of knowledge as an economic good with the identification of the limited exhaustibility of knowledge and its positive effects in terms of diachronic knowledge externalities, question the foundations of the Arrovian postulate upon which the provision of public support to R&D activities performed by firms is based. This paper calls attention on the need to shift from the provision of public support to R&D activities aimed at reducing R&D costs to compensate firms for the losses triggered by the limited appropriability of knowledge to a public support aimed at increasing the flow of R&D activities and hence the rates of accumulation of the stock of quasi-public knowledge. A strong additionality requirement such that recipients should increase the levels of R&D performed by an amount equal or larger than the public fund is consequently advocated as a standard procedure.

Typology of Networks and Equilibria in a Network Game with Production and Knowledge Externalities

This paper considers a network game as follows. In each node of a network, economy is described by the simple two-period Romer’s model of endogenous growth with production and knowledge externalities. The sum of knowledge levels in the neighbor nodes causes an externality in the production of each network node. The concept of node type is introduced and a corresponding typology of networks is suggested. As demonstrated below, all inner equilibria of the game are determined by this typology. For several typologies, the equilibrium knowledge levels are found in explicit form for the nodes that have different positions in the network.

Creativity and the city: testing the attenuation of agglomeration economies in Barcelona

The aim of this paper is to infer the spatial extent of agglomeration economies for the creative service industries (CSI) in Barcelona and its relationship with firm performance controlling for urban characteristics and demand factors. Using micro-geographic data from the mercantile register for firms between 2006 and 2015, I estimated the effect of intra-industry and inter-industry agglomeration in rings around location on productivity in Barcelona. The main results are: (1) for CSI, at a micro-spatial level, localisation economies are important within the first 250 m; (2) for non-CSI, having employees in the CSI in close proximity (250–500 m) enhances their productivity; (3) for symbolic-based CSI firms, localisation economies—mainly understood as networking and/or knowledge externalities—have positive effects on TFP at shorter distances (less than 500 m), while for the two other knowledge-based CSI (i.e. synthetic and analytical) localisation economies seem not to be so important; and (4) market potential does not offset localisation economies for CSI. These results strongly suggest the importance of agglomeration externalities in CSI, which are strongly concentrated in the largest cities.

Knowledge Technology Transfer: A Spatial Analysis within the Triad

The aim of this study is that of further exploring the knowledge spillover effects of Large International firms. In particular, we implement a spatial analysis in United States, Japan and Europe. We use technological vectors of firms to compute Jaffe proximity measure in such a way that we get knowledge externalities relative to different countries. To our end, we estimate the spatial-autoregressive model where we consider also additional endogenous variables. The findings demonstrate the significant positive effect predicted by the core literature about this topic.

Equilibrium in a Network Game with Production and Knowledge Externalities

In each node of a network, economy is described by the simple two-period Romer’s model of endogenous growth with production and knowledge externalities. The sum of knowledge levels in the neighbor nodes causes an externality in the production of each node of the network. The game equilibrium in the network is investigated. The agents’ solutions depending on the size of externality are obtained. The uniqueness of inner equilibrium is proved. The role of passive agents in network formation is studied; in particular, the possibilities of adding a passive agent to a regular network, and also of joining of regular networks through nodes with passive agents. It is shown that the sum of knowledge levels in all the nodes decreases under adding of a new link.

Modularisation and spatial dynamics in the wind turbine industry: the example of firm relocations to Hamburg

This study investigates the dynamics that resulted in the concentration of wind turbine manufacturers in Hamburg, Germany. As these locations correlate with the modularisation of global value chains, we focus on the knowledge processes that are necessary to modularise product architecture and organisation. Our approach is case-study based. We show that modularisation required distinct learning processes that disrupted the industry. Manufacturers started to benefit from industries with advanced knowledge in their modular product design and production organisation. A new spatial organisation coincided with these altered knowledge externalities.

Knowledge properties and economic policy: A new look†

This article explores the full range of effects of knowledge properties and explains how knowledge properties such as transient appropriability, non-exhaustibility, and indivisibility do not only have negative effects, but also positive ones. Knowledge externalities help reduce the cost of knowledge and imitation externalities reduce the revenue and profitability of innovations. Their effects need to be considered jointly in a single analytical framework. An analysis of their combined effects questions the scope of application of the ‘Arrovian postulate’ according to which the limited appropriability of knowledge due to its uncontrolled dissemination reduces invention. This ignores spillovers of outside knowledge, which increases invention. These are the two opposing faces of the limited appropriability of knowledge. Policy implications suggest that along with public interventions designed to support the supply of knowledge and to compensate for missing incentives, much attention should be paid to all interventions that favour the dissemination of knowledge and the knowledge connectivity of the system.

Knowledge externalities, innovation and growth in European countries: the role of institutions

ABSTRACTThis paper provides an empirical analysis of the linkages between institutions and economic growth in the European context and highlights innovation as the intermediate variable that drives this interplay. Building on the literature in the evolutionary approach to the economics of innovation and in the economic growth theory with a political economic perspective, we assume that knowledge externalities can fully take place where institutions guarantee a level playing field in the access to knowledge. We estimate the effects of a set of relevant institutional variables on the growth rate of technological knowledge and per capita GDP for a sample of European countries. The empirical analysis confirms that institutions that tend to equalise opportunities to innovate significantly amplify the impact of an exogenous increase in the knowledge base on the growth rate of per capita GDP.

International Technology Sourcing and Knowledge Spillovers: Evidence from OECD Countries

How much do firms benefit from foreign R&D and through what channel? We construct a global network of corporate innovation using more than 1.5 million patents granted to firms in OECD countries. We test the “international technology sourcing” hypothesis that foreign innovation activities tap into foreign R&D and improve home productivity through knowledge spillovers. We find that firms with stronger inventor presence in technology frontier countries benefit disproportionately more from their R&D. The strength of knowledge spillovers depends on the direction of technology sourcing. Knowledge externality is larger for firms in technology frontier countries than for firms in non-frontier countries.

Emergence of film industries in small countries: on the needs for an integrated cluster and branding strategy

Studies on the spatial organisation of film industries have grown steadily during the last decade. This literature has, however, neglected to pay attention to the specificities of the challenges faced by small countries aimed at building up a film industry in the context of global dominance by media conglomerates located in major audio-visual hubs. The conventional cluster and regional innovation systems-literature highlight respectively, reduced transaction costs, cluster-based learning and knowledge externalities, tax incentives and systemic effects in explaining the spatial distribution of film activities. These issues are all supply factors. We illustrate how the supply factor-based explanations need to integrate demand side factors for explaining emergence of film clusters located in small countries. Based on an original case study on the emergence of the Copenhagen film cluster, we document how the co-evolution of cluster externalities and shared branding (i.e., demand side) paved the way for its successful transformation.

Emergence of film industries in small countries: on the needs for an integrated cluster and branding strategy

Studies on the spatial organisation of film industries have grown steadily during the last decade. This literature has, however, neglected to pay attention to the specificities of the challenges faced by small countries aimed at building up a film industry in the context of global dominance by media conglomerates located in major audio-visual hubs. The conventional cluster and regional innovation systems-literature highlight respectively, reduced transaction costs, cluster-based learning and knowledge externalities, tax incentives and systemic effects in explaining the spatial distribution of film activities. These issues are all supply factors. We illustrate how the supply factor-based explanations need to integrate demand side factors for explaining emergence of film clusters located in small countries. Based on an original case study on the emergence of the Copenhagen film cluster, we document how the co-evolution of cluster externalities and shared branding (i.e., demand side) paved the way for its successful transformation.

Knowledge externalities and firm heterogeneity: Effects on high and low growth firms

AbstractKnowledge externalities affect high and low growth firms differently. This paper develops two theoretical arguments. The knowledge equilibrium argument postulates that knowledge externalities weaken high growth firms for the benefit of low growth firms until performance differences vanish. The knowledge competition argument proposes that high growth firms are better positioned to identify, attract, and integrate knowledge, thereby expanding the performance gap between high and low growth firms. Based on 188,936 observations of 32,736 Swedish firms from 2004 to 2011, it is analysed whether knowledge externalities enable high growth firms to surge ahead or low growth firms to catch up.