Innovation, heterogeneous firms and the region: evidence from Spain

Abstract

This paper investigates the role of regional factors in innovation performance, controlling for firms' absorptive capacity and other sources of firm heterogeneity. The findings for a sample of firms in Spain support the hypothesis that regional determinants matter, though their role is subtler than is frequently assumed. Rather than exerting a direct influence on firms' innovation, the regional context moderates the effect of internal determinants, particularly of the firms' absorptive capacity. The results indicate that the type of relevant interactions differs for product and process innovation and that they only operate for SMEs, being negligible for large firms.

How does diversity affect district innovation systems? Findings from a comparative study of european ceramics

“…Nevertheless, it is highly idiosyncratic at the company level and not freely and automatically disseminated among companies but rather absorbed by firms based on their accumulated capabilities. López-Bazo and Motellón (2017) found that the regional context moderates the effect of internal determinants-particularly, firms' absorptive capacity-and showed that the relevant interactions operate only for small and mediumsized enterprises and are negligible for large firms.…”

Do local start-ups and knowledge spillovers matter for firm-level R&D investment?

“…At the same time, expanding a firm's absorptive capacity through R&D investment provides it with greater opportunity to connect with global pipelines of new technologies, moving beyond a reliance on local networks (Bathelt et al, 2004;Trippl et al, 2018). However, there is also evidence that R&D investment enhances a firm's ability to capture and exploit knowledge generated locally (Lo´pez-Bazo and Motello´n, 2018;Prenzel et al, 2018).…”

Enhancing digital diffusion for higher productivity in Spain

“…In Spain, as local authorities have increasingly assumed competences, the total number of new regulations in a given year has increased by four folds since 1980, with the share of those introduced by local authorities reaching over 70% in 2018 (Mora-Sanguinetti and Pérez-Valls, 2020 [56]). Moreover, firms perceive an increase in regulations to operate in different regions as of 2019 (INE, 2020 [57]). The disparities in regulation across regions hamper the expansion of firms to take advantage of economies of scale.…”