Loving Outside the Neighborhood: The Conflicting Effects of External Linkages on Incremental Innovation in Clusters

Abstract

The present study assesses the explanatory capacity of three levels of factors, namely, internal to the company, and internal and external to the cluster, in predicting firms' incremental innovative performance in cluster contexts. The empirical research conducted here focuses on a sample of 92 companies from the Spanish textile industrial cluster in Valencia. Findings reveal that the significant role played by firms' interorganizational ties as a moderating factor between absorptive capacity and their incremental innovative performance. Additionally, results reflect the differentiated roles developed by intra‐ and extra‐cluster linkages in these interaction processes.

University spillovers, absorptive capacities, and firm performance

“…The internal endowment of resources and capacities has since then widely been considered as a strategic source of performance, made popular by the so-called resource-based view of the firm (Barney, 1991). Among these resources, absorptive capacities have been identified as one of the most significant notions to emerge in organizational and management research in recent decades (Audretsch et al, 2021b;Lane & Lubatkin, 1998;Lane et al, 2006;Zahra & George, 2002) to explain firm incremental innovations and performance (Ritala & Hurmelinna-Laukkanen, 2013;Rodrigo-Alarcón et al, 2020;Tomás-Miquel et al, 2019;Tödtling et al, 2009;Zahra & George, 2002).…”

“…Previous research suggests that a possible partial substitution effect between internal R&D efforts and external knowledge activities exists (Escribano et al, 2009;Tomás-Miquel et al, 2019), leading to a reduction in (incremental) firm performance. Such reductions can be produced because of the effects of higher motivation and coordination costs induced by competing teams and tasks (Minbaeva et al, 2003;Pitt & Clarke, 1999) and a costly excessive oversizing in absorptive capacity (Tomás-Miquel et al, 2019). Todorova and Durisin (2007) reorganize a new model based on a critical reflection of the central ideas on absorptive capacities by Cohen and Levinthal (1990) and Zahra and George (2002), taking circumstances into account that can be hindrance.…”

“…Only a few studies combined the internal and external factors, as well as direct and indirect effects, to investigate drivers of incremental innovation performance (Cantner et al, 2011;Ritala & Hurmelinna-Laukkanen, 2013;Tödtling et al, 2009). One recent exception is Tomás-Miquel et al (2019), confirming that interorganizational ties are a moderating factor between firms' internal absorptive capacities and their incremental innovative performance. Prajogo (2016) thereby shows that certain innovation strategies and designs do fit with their environmental surrounding and harvest good performance, while others do not.…”

Different Paths to Achieve High Technological Innovation in Clustered Firms: An Analysis of the Spanish Ceramic Tile Industry

“…We agree that disruptive innovation can deliver other incremental innovations in a cluster, and consequently, this can open a new venue of research. Nevertheless, the fact that, generally, clusters are much more associated to incremental rather than to disruptive or radical innovations [97] is the main reason which motivates our research.…”

Strategic collaboration in agro-industrial clusters: territorial dynamics within the dairy industry in Uruguay

“…Based on the social network analysis (SNA) theories and methods, previous literature has made great strides in understanding networks of firms and organizations in clusters and industrial districts (Lazzeretti et al , 2019, for a review). This literature has focused, in particular, on analyzing the drivers of network formation (Balland et al , 2013; Capone and Lazzeretti, 2018), the diffusion of knowledge through networks (Giuliani, 2007; Molina-Morales et al , 2018) and the interplay between local connections and global networks (Bathelt et al , 2004; Tomás‐Miquel et al , 2019). Previous literature has also pointed out that clusters and industrial districts are not compact and homogeneous entities, as neither do all firms contribute equally to the formation of networks, nor do they benefit equally from them (Giuliani and Bell, 2005; Hervas-Oliver et al , 2018).…”