Local Knowledge Spillovers, Innovation and Economic Performance in Developing Countries: A discussion of alternative specifications

Kesidou, Effie and Szirmai, Adam (2008). Local Knowledge Spillovers, Innovation and Economic Performance in Developing Countries: A discussion of alternative specifications. UNU-MERIT.

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  • Author Kesidou, Effie
    Szirmai, Adam
    Title Local Knowledge Spillovers, Innovation and Economic Performance in Developing Countries: A discussion of alternative specifications
    Publication Date 2008
    Place of Publication Maastricht
    Publisher UNU-MERIT
    Pages 40
    Abstract This paper examines the importance of local knowledge spillovers for the innovative and economic performance of firms in a developing country context. Theoretical and empirical studies in advanced economies underline the significance of local knowledge spillovers for innovation. However, not much is known about whether local knowledge spillovers work similarly in developing countries. This analysis is based on an original innovation survey in the software industry in Uruguay. The survey focuses on the direct identification and measurement of local knowledge spillovers; pure knowledge spillovers are distinguished from commercial knowledge transactions. Both knowledge spillovers and knowledge transactions are measured at the local and at the international level. The study concludes that local knowledge spillovers play a crucial role in enhancing the innovative performance of software firms in Uruguay. However, for the economic performance of the firms, international knowledge transactions turn out to be more important than local knowledge spillovers. Local Knowledge Spillovers may be essential for innovation, but not sufficient for economic success. Firms in developing countries need to be connected to both the local and the international economy.
    Keyword Local knowledge spillovers
    Innovation
    Economic performance
    Developing economies
    JEL L86
    O31
    O33
    Copyright Holder UNU-MERIT
    Copyright Year 2008
    Copyright type Creative commons
    ISSN 18719872
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