Spatial embeddedness and firm performance: an empirical exploration of the effects of proximity on innovative and economic performance

Recent theoretical developments in organisation science and regional economics have emphasised the importance of networks and geographical proximity for the performance of firms. Empirical evidence on these relationships is scarce, though, especially in regional science. In this paper, we address the following research question: to what extent do firm-specific resources, organisational embeddedness, proximity, and industry factors influence innovative and economic outcomes of innovative firms? We used a theoretical synthesis of regional and organisational science to build a research model that enabled us to derive several hypotheses on the influence of proximity on outcomes, taking other important predictors for performance into account. Our empirical findings confirm the importance of proximity especially for innovative outcomes. Moreover, we found that in particular network relations with buyers and suppliers are conducive for firm performance, whereas other indicators of embeddedness and of internal resources have little impact probably due to substitution effects. Finally, regional as well sectoral R&D spillovers influence outcomes in a positive way.

Learning, innovation and proximity. An empirical exploration of patterns of learning: a case study

learning; innovation

Regional systems of innovation from within.An empirical specification of the relation between technological dynamics and interaction between multiple actors in a Dutch region

technological dynamics; interaction patterns; innovation

R&D Cooperation in a Transaction Cost Perspective

research and development; cooperation; transaction costs

Do Networks Matter for Innovation? The usefulness of the economic network approach in analysing innovation

Economic network theory emphasises the importance of external resource mobilisation. In this paper, the relations between the mobilisation and use of internal and external resources in innovation processes, and the innovative performance of firms, are explored empirically, using an adapted version of Håkansson's (1987) economic network model. The main research question was: to what extent do network variables contribute to the innovative performance of firms? To answer this question, we assessed the explanatory power of economic network theory within the empirical study of innovation. Firms were found to engage in various configurations of internal and external resource bases, enabling them to innovate with better results. The relations in the estimated models are strongly influenced by moderating variables such as sector, and type and level of innovations produced. Our main conclusion is that models that include both internal and external resources explain the innovative performance better than models in which only internal resources are used

The influence of organizational performance feedback on the focus of attention

In this paper we build a multi-level theory of how organizational performance feedback impacts individual decision-maker cognitions resulting in change of the focus of attention to strategic areas at the Top Management Team level. Specifically, we argue that if performance compares unfavorably to aspiration levels this triggers decision-makers to reconsider current strategies which in turn will lead them to consider different ones. As a result, change in the focus of attention to strategic areas at the Top Management Team level will be observed. Our empirical approach involving a business simulation and repeated questionnaires allowed us to capture the focus of attention of the teams in our study. Moreover, we were able to directly capture their performance feedback evaluation process in great detail

articles: Firm clustering and innovation: Determinants and effects

In this article we ask why innovator firms engage in innovation networks, and which factors explain the spatial dispersion of these networks. Benefits of the use of internal and external knowledge resources for innovative performance of firms were partially confirmed. Especially the utilisation of external competences drawn from buyers and suppliers had stronger effects on innovative performance if complexity of innovation projects was high. Spatial concentration of innovation networks of buyers and suppliers turned out to have a reciprocal, positive relation with interaction intensity between firms. Interaction enhances spatial concentration of relations and vice versa, although the strength of effects differs for ties with buyers and suppliers. Finally we found that higher regional economic embeddedness increases spatial concentration of innovation networks, whereas R& D effort had no effect at all.Organisational and spatial embeddedness, innovation output, networks