Nadia Albis Salas, Isabel Alvarez and John Cantwell
This paper explains the mechanisms underlying the generation of two-way knowledge spillovers through the interaction of subsidiaries with differentiated local responsibilities and…
Abstract
Purpose
This paper explains the mechanisms underlying the generation of two-way knowledge spillovers through the interaction of subsidiaries with differentiated local responsibilities and domestic firms.
Design/methodology/approach
The study is based on firm-level panel data from a census of Colombian manufacturing firms for the period 2003–2012. The estimation procedure involves two stages. In the first one, total factor productivity (TFP) of foreign and domestic firms is estimated. In a second step, we estimate conventional spillovers (from foreign-owned to local firms) and reverse spillovers (from local to foreign-owned firms) separately, using a random effect approach.
Findings
This study’s findings reveal that only locally creative subsidiaries enjoy positive and significant two-way knowledge spillover effects. The connectivity of subsidiaries to local and international networks is reinforced by reciprocal relationships among actors that enhance bidirectional knowledge flows, these being favored by the dynamics of clustering effects.
Originality/value
The paper contributes with new empirical evidence about the mechanism explaining how the technological heterogeneity of subsidiaries plays a determinant role in the generation of both knowledge flows from foreign to domestic firms and to the reverse, all integrated into the same framework.
Details
Keywords
Nadia Albis Salas, Henry Mora Holguin, Diana Lucio-Arias, Erika Celene Sánchez and Nelson Villarreal
This paper aims to explore the factors that influence innovation and productivity in small and medium-sized enterprises (SMEs) manufacturing enterprises in Colombia, in comparison…
Abstract
Purpose
This paper aims to explore the factors that influence innovation and productivity in small and medium-sized enterprises (SMEs) manufacturing enterprises in Colombia, in comparison with larger firms.
Design/methodology/approach
The study was based on firm-level panel data extracted from a census of Colombian manufacturing firms between 2007 and 2014. The authors used an adapted version of the Crepon-Duguet-Mairesse (CDM) sequential approach that interrelates R&D intensity, innovation outputs and productivity.
Findings
This study's findings indicate that investing in R&D has a positive impact on innovation in both SMEs and larger firms. However, the effect on productivity is significantly higher for SMEs. Evidence also suggests that the innovation performance of SMEs and larger firms is influenced by co-evolution among the firm's resources and capabilities, knowledge flows with external organizations, access to funding and knowledge appropriability conditions. However, highly qualified personnel, internal and commercial sources of funding, and market knowledge sourcing are crucial for innovation in SMEs. These conclusions are especially relevant for the design of industrial and innovation policies in developing economies, where innovation is a prerequisite for catching up and economic advancement.
Originality/value
The paper provides new empirical evidence on the determinants of innovation in SMEs, the mechanisms by which innovation capabilities and outputs affect its productive performance, and how the relationship between these dimensions varies with firm size in the context of a developing country.