Determinants of innovation: the role of the agglomeration economies
DOI:
https://doi.org/10.25097/rep.n31.2020.04Keywords:
agglomeration economies, competition, innovation, probit, R&DAbstract
Innovation is an important driver of productivity and economic growth. Then, how innovation emerges or how it can be reinforced is a relevant question to tackle, especially in developing economies. The main aim of this study is to identify the determinants of innovation with special emphasis on the agglomeration externalities. The employed data is obtained from the National Survey of Science, Technology and Innovation Activities (ACTI), corresponding to the periods 2009-2011 and 2012-2014. Using a pooled data of 8,025 firms, discrete choice models are estimated for different choices of firms: general innovation, product, process, organizational and marketing innovation. The results show that what matters for innovation is the presence of other innovative firms rather than the concentration of firms in general. The agglomeration externalities derived from diversity predominate over those derived from specialization. The most relevant individual factors that drive innovation are the investment in R&D and the qualified workers.
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References
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Audresch, D. and Feldman M. (2004). Chapter 61 - Knowledge Spillovers and the Geography of Innovation. In Handbook of Regional and Urban Economics, 4, 2713-2739
Autant-Bernard, C., Guironnet, J.-P., and Massard, N. (2010). The Determinants of Innovation Adoption. SSRN Electronic Journal. doi:10.2139/ssrn.1731550
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Breschi, S., and Lissoni, F. (2001). Knowledge spillovers and local innovation systems: a critical survey. Industrial and Corporate Change, 10(4), 975-1005. doi: 10.1093/icc/10.4.975
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Carvalho, L., Costa, T., and Caiado, J. (2013). Determinants of innovation in a small open economy: a multidimensional perspective. Journal of Business Economics and Management, 14(3), 583–600. doi: 10.3846/16111699.2012.701225
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Cohen, W., and Klepper, S. (1996a). “A reprise of size and R&D.” Economic Journal, 106 (437), 925-51. doi: 10.2307/2235365
Combes, P.-P. (2000). Economic structure and local growth: France, 1984–1993. Journal of Urban Economics, 47, 329–355. doi:10.1006/juec.1999.2143
Crowley, F., and Jordan, D. (2017). Does more competition increase business-level innovation? Evidence from domestically focused firms in emerging economies. Economics of Innovation and New Technology, 26(5), 477–488. doi: 10.1080/10438599.2016.1233627
Da Silva Catela, E. Y., Goncalves, F., and Porcile, G. (2010). Brazilian municipalities: Agglomeration economies and development levels in 1997 and 2007. CEPAL Review 101, 141-156.
Dolińska, M. (2015). Knowledge based development of innovative companies within the framework of innovation networks. Innovation, 17(3), 323–340. doi:10.1080/14479338.2015.1054603
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Feldman, M. (1994), “Knowledge Complementarity and Innovation,” Small Business Economics, 6(3), 363-372. doi:10.1007/bf01065139
Feldman, M., and Audretsch, D. (1999), Innovation in Cities: Science-Based Diversity, Specialization and Localized Competition, European Economic Review, 43, 409-429. doi:10.1016/S0014-2921(98)00047-6
Glaeser, E., Kallal, H., Scheinkman, J., Shleifer, A. (1992). “Growth in cities.” Journal of Political Economy, 100 (6), 1126-52. doi:10.1086/261856
González, X., Miles-Touya, D., and Pazó, C. (2016). R&D, worker training and innovation: firm-level evidence. Industry and Innovation, 23(8), 694–712. doi:10.1080/13662716.2016.1206463
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Greene, W. (2003). Econometric Analysis. 5th Edition. Upper Saddle River, New Jersey: Pearson Education, Inc.
Griliches, Z (1979), “Issues in Assessing the Contribution of R&D to Productivity Growth,” Bell Journal of Economics, 10, 92-116.
Gujarati, N. and Porter, M. (2010). Econometría. Quinta edicion. McGraw-Hill.
Jacobs, J. (1969). The economy of cities. Random House, New York.
Kaplinksky, R. (ed), 2006. Asian drivers: opportunities and threats. IDS Bullletin, 37 (1).
Kim, M., and Lee, S. Y. (2011). The effects of government financial support on business innovation in South Korea. Asian Journal of Technology Innovation, 19(1), 67–83. doi: 10.1080/19761597.2011.578426
Krzanowski, W. J. and Hand, D. J. (2009). ROC curves for continuous data. CRC Press, Taylor Francis Group, Florida.
López-Mielgo, N., Montes-Peón, J. M., and Vázquez-Ordás, C. (2012). ¿Qué necesita una empresa para innovar? Investigación, experiencia y persistencia. Revista Europea de Dirección y Economía de La Empresa, 21(3), 266–281. doi: 10.1016/j.redee.2012.05.005
Lucas, R.E. (1988). “On the mechanics of economic development.” Journal of Monetary Economics, 22, 3-42. doi:10.1016/0304-3932(88)90168-7
Lundvall, B.-A. (Ed), 1992. National systems of innovation. Towards a theory of innovation and interactive learning. Pinter, London.
Markusen, A. (1985) Profit Cycles, Oligopoly and Regional Development, Cambridge, MA: MIT Press.
Melo, P., Graham, D. and Noland, R. (2009). A meta-analysis of estimates of urban agglomeration economies. Regional Science and Urban Economics. 39(1), 332-342. doi: 10.1016/j.regsciurbeco.2008.12.002
Montoro-Sanchez, A., Mora-Valentín, E.-M., and Ortiz-de-Urbina-Criado, M. (2012). Localización en parques científicos y tecnológicos y cooperación en I+D+i como factores determinantes de la innovación. Revista Europea de Dirección y Economía de La Empresa, 21, 182–190. doi:10.1016/S1019-6838(12)70005-7
Morrison, A. (2008). Gatekeepers of knowledge within industrial districts: Who they are, how do they interact? Regional Studies, 42(6), 817-835. doi: 10.1080/00343400701654178
Novales, A. (1993). Econometria, volumen 2. McGraw-Hill Intereamericana de España.
OECD/World Bank (2009), Innovation and Growth: Chasing a Moving Frontier, OECD Publishing, Paris.
OECD/IDRC (2010), Innovation and the Development Agenda, OECD Publishing, Paris.
Porter, M.,1990, The Comparative Advantage of Nations, New York: Free Press.
Quigley, J., Wilhelmsson, M., and Andersson, R. (2005). Agglomeration and the Spatial Distribution of Creativity. Papers in Regional Science, 84, 445–464. doi:10.1111/j.1435-5957.2005.00049.x
Romer, P. (1990). “Endogenous technical change.” Journal of Political Economy, 98 (5), S71-102. doi:10.3386/w3210
Saito, H., and Gopinath, M. (2009). Plants’ self selection, agglomeration economies and regional productivity in Chile. Journal of Economic Geography, 9(1), 539–558. doi:10.1093/jeg/lbp010
Solon, G., Haider, S., and Wooldridge, J. M. (2015). What Are We Weighting For? Journal of Human Resources, 50(2), 301–316. doi:10.3386/w18859
Wooldridge, J. M. (2010). Introducción a la Econometría: Un Enfoque Moderno, 4a. edición. México, D.F.: Cengage Learning Editores.
Zambon, S., and Monciardini, D. (2015). Intellectual capital and innovation. A guideline for future research. Journal of Innovation Economics, 17, 13. doi:10.3917/jie.017.0013
Acs, Zoltan J. and David B. Audretsch (1988), Innovation in Large and Small Firms: An Empirical Analysis, American Economic Review, 78 (4), 678-690. Retrieved from https://www.jstor.org/stable/1811167
Akcigit, U., Kerr, W. (2010). “Growth through heterogeneous innovations”. NBER Working Paper 16443. doi:10.3386/w16443
Antolín-López, R., Martínez-del-Río, J., and Céspedes-Lorente, J. (2013). Cooperación y competencia como antecedentes de la innovación de producto. ¿Aplican las empresas nuevas y establecidas una lógica diferenciada? Investigaciones Europeas de Dirección y Economía de La Empresa, 19(1), 53–62. doi:10.1016/j.iedee.2012.09.001
Antolín-López, R., Martínez-del-Río, J., and Céspedes-Lorente, J. (2016). Fomentando la innovación de producto en las empresas nuevas: ¿Qué instrumentos públicos son más efectivos? European Research on Management and Business Economics, 22(1), 38–46. doi:10.1016/j.iedee.2015.05.002
Audresch, D. and Feldman M. (2004). Chapter 61 - Knowledge Spillovers and the Geography of Innovation. In Handbook of Regional and Urban Economics, 4, 2713-2739
Autant-Bernard, C., Guironnet, J.-P., and Massard, N. (2010). The Determinants of Innovation Adoption. SSRN Electronic Journal. doi:10.2139/ssrn.1731550
Benito-Hernández, S., Platero-Jaime, M., and Rodríguez-Duarte, A. (2012). Factores determinantes de la innovación en las microempresas españolas: La importancia de los factores internos. Universia Business Review, 104–121. Retrieved from https://www.redalyc.org/articulo.oa?id=43323186006
Berrutti, F., and Bianchi, C. (2019). Effects of public funding on firm innovation: transforming or reinforcing a weak innovation pattern? Economics of Innovation and New Technology, 1–18. doi: 10.1080/10438599.2019.1636452
Breschi, S., and Lissoni, F. (2001). Knowledge spillovers and local innovation systems: a critical survey. Industrial and Corporate Change, 10(4), 975-1005. doi: 10.1093/icc/10.4.975
Carlino, G., Chatterjee, S., Hunt, R. (2007). “Urban density and the rate of invention.” Journal of Urban Economics, 61 (3), 389-419. doi: 10.1016/j.jue.2006.08.003
Carlino, G. and Kerr, W. (2015). Agglomeration and Innovation. In: Handbook of Regional and Urban Economics, Vol. 5, 349-404. doi:10.1016/b978-0-444-59517-1.00006-4
Carvalho, L., Costa, T., and Caiado, J. (2013). Determinants of innovation in a small open economy: a multidimensional perspective. Journal of Business Economics and Management, 14(3), 583–600. doi: 10.3846/16111699.2012.701225
Claver-Cortés, E., Marco-Lajara, Bartolome, Manresa-Marhuenda, E. (2016). Types of agglomeration economies: effects on business innovation. Contemporary Economics, 10(3): 217-232. doi: 10.5709/ce.1897-9254.211
Claver-Cortés, E., Marco-Lajara, B., Manresa-Marhuenda, E., García Lillo, F., and Seva Larrosa, P. (2017). Location Decisions and Agglomeration Economies: Domestic and Foreign Companies. Journal of Regional Research, 39, 99-135
Cohen, W., and Klepper, S. (1996a). “A reprise of size and R&D.” Economic Journal, 106 (437), 925-51. doi: 10.2307/2235365
Combes, P.-P. (2000). Economic structure and local growth: France, 1984–1993. Journal of Urban Economics, 47, 329–355. doi:10.1006/juec.1999.2143
Crowley, F., and Jordan, D. (2017). Does more competition increase business-level innovation? Evidence from domestically focused firms in emerging economies. Economics of Innovation and New Technology, 26(5), 477–488. doi: 10.1080/10438599.2016.1233627
Da Silva Catela, E. Y., Goncalves, F., and Porcile, G. (2010). Brazilian municipalities: Agglomeration economies and development levels in 1997 and 2007. CEPAL Review 101, 141-156.
Dolińska, M. (2015). Knowledge based development of innovative companies within the framework of innovation networks. Innovation, 17(3), 323–340. doi:10.1080/14479338.2015.1054603
Duranton, G. and Puga, D. (2001) Nursery cities: urban diversity, process innovation, and the life cycle of products. American Economic Review, 91(5): 1454–1477. doi: 10.1257/aer.91.5.1454
Feldman, M. (1994), “Knowledge Complementarity and Innovation,” Small Business Economics, 6(3), 363-372. doi:10.1007/bf01065139
Feldman, M., and Audretsch, D. (1999), Innovation in Cities: Science-Based Diversity, Specialization and Localized Competition, European Economic Review, 43, 409-429. doi:10.1016/S0014-2921(98)00047-6
Glaeser, E., Kallal, H., Scheinkman, J., Shleifer, A. (1992). “Growth in cities.” Journal of Political Economy, 100 (6), 1126-52. doi:10.1086/261856
González, X., Miles-Touya, D., and Pazó, C. (2016). R&D, worker training and innovation: firm-level evidence. Industry and Innovation, 23(8), 694–712. doi:10.1080/13662716.2016.1206463
Guevara-Rosero, G. C., Riou, S. and Autant-Bernard, C. Agglomeration externalities in Ecuador: do urbanization and tertiarization matter?. Regional Studies, 53(5), 706-719 https://doi.org/10.1080/00343404.2018.1470325
Greene, W. (2003). Econometric Analysis. 5th Edition. Upper Saddle River, New Jersey: Pearson Education, Inc.
Griliches, Z (1979), “Issues in Assessing the Contribution of R&D to Productivity Growth,” Bell Journal of Economics, 10, 92-116.
Gujarati, N. and Porter, M. (2010). Econometría. Quinta edicion. McGraw-Hill.
Jacobs, J. (1969). The economy of cities. Random House, New York.
Kaplinksky, R. (ed), 2006. Asian drivers: opportunities and threats. IDS Bullletin, 37 (1).
Kim, M., and Lee, S. Y. (2011). The effects of government financial support on business innovation in South Korea. Asian Journal of Technology Innovation, 19(1), 67–83. doi: 10.1080/19761597.2011.578426
Krzanowski, W. J. and Hand, D. J. (2009). ROC curves for continuous data. CRC Press, Taylor Francis Group, Florida.
López-Mielgo, N., Montes-Peón, J. M., and Vázquez-Ordás, C. (2012). ¿Qué necesita una empresa para innovar? Investigación, experiencia y persistencia. Revista Europea de Dirección y Economía de La Empresa, 21(3), 266–281. doi: 10.1016/j.redee.2012.05.005
Lucas, R.E. (1988). “On the mechanics of economic development.” Journal of Monetary Economics, 22, 3-42. doi:10.1016/0304-3932(88)90168-7
Lundvall, B.-A. (Ed), 1992. National systems of innovation. Towards a theory of innovation and interactive learning. Pinter, London.
Markusen, A. (1985) Profit Cycles, Oligopoly and Regional Development, Cambridge, MA: MIT Press.
Melo, P., Graham, D. and Noland, R. (2009). A meta-analysis of estimates of urban agglomeration economies. Regional Science and Urban Economics. 39(1), 332-342. doi: 10.1016/j.regsciurbeco.2008.12.002
Montoro-Sanchez, A., Mora-Valentín, E.-M., and Ortiz-de-Urbina-Criado, M. (2012). Localización en parques científicos y tecnológicos y cooperación en I+D+i como factores determinantes de la innovación. Revista Europea de Dirección y Economía de La Empresa, 21, 182–190. doi:10.1016/S1019-6838(12)70005-7
Morrison, A. (2008). Gatekeepers of knowledge within industrial districts: Who they are, how do they interact? Regional Studies, 42(6), 817-835. doi: 10.1080/00343400701654178
Novales, A. (1993). Econometria, volumen 2. McGraw-Hill Intereamericana de España.
OECD/World Bank (2009), Innovation and Growth: Chasing a Moving Frontier, OECD Publishing, Paris.
OECD/IDRC (2010), Innovation and the Development Agenda, OECD Publishing, Paris.
Porter, M.,1990, The Comparative Advantage of Nations, New York: Free Press.
Quigley, J., Wilhelmsson, M., and Andersson, R. (2005). Agglomeration and the Spatial Distribution of Creativity. Papers in Regional Science, 84, 445–464. doi:10.1111/j.1435-5957.2005.00049.x
Romer, P. (1990). “Endogenous technical change.” Journal of Political Economy, 98 (5), S71-102. doi:10.3386/w3210
Saito, H., and Gopinath, M. (2009). Plants’ self selection, agglomeration economies and regional productivity in Chile. Journal of Economic Geography, 9(1), 539–558. doi:10.1093/jeg/lbp010
Solon, G., Haider, S., and Wooldridge, J. M. (2015). What Are We Weighting For? Journal of Human Resources, 50(2), 301–316. doi:10.3386/w18859
Wooldridge, J. M. (2010). Introducción a la Econometría: Un Enfoque Moderno, 4a. edición. México, D.F.: Cengage Learning Editores.
Zambon, S., and Monciardini, D. (2015). Intellectual capital and innovation. A guideline for future research. Journal of Innovation Economics, 17, 13. doi:10.3917/jie.017.0013
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Published
2020-01-30
How to Cite
Guevara Rosero, G. C., Ramirez, J., & Saez, D. (2020). Determinants of innovation: the role of the agglomeration economies. Economy and Politics Journal, (31), 50–70. https://doi.org/10.25097/rep.n31.2020.04
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