Innovation and absorptive capacity: What is the role of technological frontier?
Year: 2011
Type: preprint
Abstract: This paper explores how absorptive capacity affects the innovative\nperformance and productivity dynamics of Spanish firms. A firm’s efficiency\nlevels are measured using two variables: the labour productivity and the Total\nFactor Productivity (TFP). The theoretical framework is based on the seminal\ncontributions of Cohen and Levinthal (1989, 1990) regarding absorptive\ncapacity; and the applied framework is based on the four-stage structural\nmodel proposed by Crépon, Duguet and Mairesse (1998) for setting the\ndeterminants of R&D, the effects of R&D activities on innovation outputs, and\nthe impacts of innovation on firm productivity. The present study uses a twostage\nstructural model. In the first stage, a probit estimation is used to\ninvestigate how the sources of R&D, the absorptive capacity and a vector of\nthe firm’s individual features influence the firm’s likelihood of developing\ninnovations in products or processes. In the second phase, a quantile\nregression is used to analyze the effect of R&D sources, absorptive capacity\nand firm characteristics on productivity. This method shows the elasticity of\neach exogenous variable on productivity according to the firms’ levels of\nefficiency, and thus allows us to distinguish between firms that are close to\nthe technological frontier and those that are further away from it. We used\nextensive firm-level panel data from 5,575 firms for the 2004-2009 period. The\nresults show that the internal absorptive capacity has a strong impact on the\nproductivity of firms, whereas the role of external absorptive capacity differs\naccording to nature of the each industry and according the distance of firms\nfrom the technological frontier.\nKey words: R&D sources, innovation strategies, absorptive capacity,\ntechnological distance, quantile regression.
Authors: Verònica Gombau, Agustí Segarra i Blasco
Institution: Universitat Rovira i Virgili
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W118946792