Working Paper: CEPR ID: DP8267
Authors: Rune Dahl Fitjar; Andrés Rodríguez-Pose
Abstract: The geographical sources of innovation of firms have been hotly debated. While the traditional view is that physical proximity within city-regions is key for the innovative capacity of firms, the literature on ?global pipelines? has been stressing the importance of establishing communication channels to the outside world. This paper uses a specifically tailored survey of the level of innovation of 1604 firms of more than 10 employees located in the five largest Norwegian city-regions (Oslo, Bergen, Stavanger, Trondheim, and Kristiansand) in order to determine a) the geographical dimension of the sources of innovation and b) the factors behind the propensity to innovate in Norwegian firms. The results stress that while interaction with a multitude of partners within Norwegian city-regions or with other national partners has a negligible effect on firm innovation, those firms with a greater diversity of international partners tend to innovate more and introduce more radical innovations. The results also highlight that the roots of this greater innovative capacity lie in a combination of firm--size of firms, share of foreign ownership, and sector--and cultural--the level of open-mindedness of managers--characteristics.
Keywords: city-regions; firms; innovation; interaction; norway; partnerships; pipelines; radical innovation
JEL Codes: O31; O33; R11; R58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| International partnerships (F53) | Increased innovation (O35) |
| Diversity of international partnerships (F53) | Increased innovation (O35) |
| Manager characteristics (openness to international collaboration) (O36) | International partnerships (F53) |
| International partnerships (F53) | Radical product innovation (O36) |
| International partnerships (F53) | Radical process innovation (O35) |
| Local partnerships (L14) | Innovation (O35) |
| National partnerships (L14) | Innovation (O35) |