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When interaction matters: the contingent effects of spatial knowledge spillovers and internal R&I on firm productivity

  • Timo MitzeEmail author
  • Teemu Makkonen
Article

Abstract

This work studies the linkages between spatially bound knowledge spillovers, internal research, and innovation (R&I) activities and firm productivity. Spillovers are modeled to emanate from intra- and extra-sectoral R&I activities in the firms’ regional business environments. We specifically test for non-linearities in the complex relationship between these internal and external knowledge sources and quantify their joint marginal effect on firm productivity. Our empirical results for a large panel of German manufacturing firms (1) underline the overall importance of knowledge spillovers in driving productivity and (2) point at distinct interactions between the included knowledge sources: First, we find that intra-sectoral knowledge spillovers only have a statistically significant effect on firm productivity when extra-sectoral spillovers are sufficiently large. Secondly, the link between knowledge spillovers and productivity varies with the level of the firms’ internal R&I activities.

Keywords

Firm productivity Research Innovation Spatial knowledge spillovers Interaction terms 

JEL Classification

C23 O10 O30 R11 

Notes

Supplementary material

10961_2019_9729_MOESM1_ESM.docx (789 kb)
Supplementary material 1 (DOCX 789 kb)

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Authors and Affiliations

  1. 1.Department of Business and EconomicsUniversity of Southern DenmarkSønderborgDenmark
  2. 2.Karelian Institute, University of Eastern FinlandJoensuuFinland

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