Abstract
This study analyzes the geography of innovation in India by performing exploratory spatial data analysis (ESDA) on the product innovation of the manufacturing sector of the 23 states for the year 2013–2014. It is found that spatial clustering is prevalent for product innovation majorly among the northern region, and these results are also supported by local indicators of spatial association (LISA) statistics. This exploratory spatial data analysis is extended to the sub-sectoral product innovation categorized as “analytical” and “synthetic” knowledge-based sectors that constitute applied research and basic research. It is found that analytical knowledge or applied research is relatively more concentrated than synthetic knowledge or basic research. Further, based on ordinary least square (OLS) and spatially lagged X (SLX) model, this study found that the manufacturing sector’s product innovation for each region is positively influenced by access to finance, formal research, and age. This study is based on “The India 2014 Enterprise Survey Data Set” collected by the World Bank Group.
Similar content being viewed by others
Notes
India Brand Equity Foundation (IBEF) Report: Innovation in Indian Manufacturing; Pg.6; Url: https://www.ibef.org/download/Innovation-in-Indian-Manufacturing-310512.pdf; accessed on 21/7/2019
India Brand Equity Foundation (IBEF) Report: Indian Manufacturing: Overview and Prospects; Pg.4; Url: https://www.ibef.org/download/Indian-Manufacturing-110512.pdf; accessed on 21/7/2019
References
Acs, Z. J., Anselin, L., & Varga, A. (2002). Patents and innovation count as measures of regional production of new knowledge. Research Policy, 31(7), 1069–1085.
Aghion, P., Durlauf, S. N., & Durlauf, S. (2005). Handbook of Economic Growth, 1, 1639–1699.
Aghion, P., Blundell, R., Griffith, R., Howitt, P., & Prantl, S. (2009). The effects of entry on incumbent innovation and productivity. The Review of Economics and Statistics, 91(1), 20–32.
Albuquerque, E. (2003). Immature systems of innovation: Introductory notes about a comparison between South Africa, India, Mexico and Brazil based on science and technology statistics. In First Globelics Conference (available at https://www.globelics.org).
Amin, A., & Wilkinson, F. (1999). Learning, proximity and industrial performance: an introduction. Cambridge Journal of Economics, 23(2), 121–125.
Anselin, L. (1995). Local indicators of spatial association—LISA. Geographical Analysis, 27(2), 93–115.
Anselin, L. (1998). GIS research infrastructure for spatial analysis of real estate markets. Journal of Housing Research, 9(1), 113–133.
Anselin, L., Syabri, I., & Kho, Y. (2006). GeoDa: an introduction to spatial data analysis. Geographical Analysis, 38(1), 5–22.
Anselin, L., Sridharan, S., & Gholston, S. (2007). Using exploratory spatial data analysis to leverage social indicator databases: the discovery of interesting patterns. Social Indicators Research, 82(2), 287–309.
Asheim, B. T., & Gertler, M. S. (2009). The geography of innovation: Regional innovation systems. In the Oxford handbook of innovation (pp. 291–317).
Audretsch, D. B., & Feldman, M. P. (1996). R&D spillovers and the geography of innovation and production. The American Economic Review, 86(3), 630–640.
Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2011). Firm innovation in emerging markets: The role of finance, governance, and competition. Journal of Financial and Quantitative Analysis, 46(6), 1545–1580.
Baumol, W. J. (2002). The free-market innovation machine: Analyzing the growth miracle of capitalism. Princeton, NJ: Princeton University Press.
Beck, T., Demirgüç-Kunt, A., & Maksimovic, V. (2008). Financing patterns around the world: Are small firms different? Journal of Financial Economics, 89(3), 467–487.
Bound, K. (2007). India: The uneven innovator. London: Demos.
Bruche, G. (2009). A new geography of innovation—China and India rising. Transnational Corporations Review, 1(4), 24–27.
Carlino, G. A., Chatterjee, S., & Hunt, R. M. (2007). Urban density and the rate of invention. Journal of Urban Economics, 61(3), 389–419.
Celebioglu, F., & Dall' erba, S. (2010). Spatial disparities across the regions of Turkey: An exploratory spatial data analysis. The Annals of Regional Science, 45(2), 379–400.
Coe, D. T., & Helpman, E. (1995). International r&d spillovers. European Economic Review, 39(5), 859–887.
Cohen, W. M., & Levinthal, D. A. (1989). Innovation and learning: The two faces of R & D. The Economic Journal, 99(397), 569–596.
Cooke, P. (2002). Regional innovation systems: General findings and some new evidence from biotechnology clusters. The Journal of Technology Transfer, 27(1), 133–145.
Cornett, M. M., Erhemjamts, O., & Tehranian, H. (2019). The competitive environment and innovation intensity. Global Finance Journal, 41, 44–59.
Cre’ pon, B., Duguet, E., & Mairesse, J. (1998). Research, innovation and productivity: An econometric analysis at the firm level. Economics of Innovation and New Technology, 7(2), 115–158.
Crescenzi, R., Rodríguez-Pose, A., & Storper, M. (2012). The territorial dynamics of innovation in China and India. Journal of Economic Geography, 12(5), 1055–1085.
Custódio, C., Ferreira, M. A., & Matos, P. (2019). Do general managerial skills spur innovation? Management Science, 65(2), 459–476.
Dasgupta, P., & Stiglitz, J. (1980). Industrial structure and the nature of the innovative activity. The Economic Journal, 90(358), 266–293.
Dutz, M. A. (2007). Unleashing India’s innovation: Toward sustainable and inclusive growth (English). Washington, D.C: World Bank Group (accessed on: 20/7/2019). Available on url: http://documents.worldbank.org/curated/en/901801468292888364/Unleashing-Indias-innovation-Toward-sustainable-and-inclusive-growth.
Elhorst, J. P. (2010). Applied spatial econometrics: Raising the bar. Spatial Economic Analysis, 5(1), 9–28.
Elhorst, J. P., & Halleck Vega, S. (2017). The SLX model: extensions and the sensitivity of spatial spillovers to W. Papeles de Economía Española, 152, 34–50.
Falahat, M., Ramayah, T., Soto-Acosta, P., & Lee, Y. Y. (2020). SMEs internationalization: The role of product innovation, market intelligence, pricing and marketing communication capabilities as drivers of SMEs’ international performance. Technological Forecasting and Social Change, 152, 119908.
Fan, P. (2011). Innovation capacity and economic development: China and India. Economic Change and Restructuring, 44(1–2), 49–73.
Galende, J., & de la Fuente, J. M. (2003). Internal factors determining a firm’s innovative behaviour. Research Policy, 32(5), 715–736.
Goettler, R. L., & Gordon, B. R. (2014). Competition and product innovation in dynamic oligopoly. Quantitative Marketing and Economics, 12(1), 1–42.
Gonzalez-Zapatero, C., Gonzalez-Benito, J., & Lannelongue, G. (2016). Antecedents of functional integration during new product development: The purchasing–marketing link. Industrial Marketing Management, 52, 47–59.
Griffith, R., Redding, S., & Van Reenen, J. (2004). Mapping the two faces of R&D: Productivity growth in a panel of OECD industries. Review of Economics and Statistics, 86, 883–895.
Guellec, D., Van Pottelsberghe de la Potterie, B. (2001) R&D and productivity growth: Panel data analysis of 16 OECD countries. OECD STI Working Paper No. 3.
Hall, B. H., Lotti, F., & Mairesse, J. (2009). Innovation and productivity in SMEs: Empirical evidence for Italy. Small Business Economics, 33(1), 13–33.
Halleck Vega, S., & Elhorst, J. P. (2015). The SLX model. Journal of Regional Science, 55, 339–363.
Howells, J. R. (2002). Tacit knowledge, innovation and economic geography. Urban Studies, 39(5–6), 871–884.
Kale, S., & Rath, B. N. (2019). Does innovation enhance productivity in case of selected indian manufacturing firms? The Singapore Economic Review, 64(05), 1225–1250.
Kaur, N., & Kaur, P. (2020). What drives innovation in micro, small, & medium enterprises? Journal of Public Affairs, e2336. (Forthcoming).
Kaur, P., Kaur, N., & Kanojia, P. (2020). Firm innovation and access to finance: Case of Indian SMEs. Working Paper.
Kumar, N., & Saqib, M. (1996). Firm size, opportunities for adaptation and in-house R & D activity in developing countries: The case of Indian manufacturing. Research Policy, 25(5), 713–722.
Kumar, N., & Siddharthan, N. S. (1994). Technology, firm size and export behaviour in developing countries: The case of Indian enterprises. The Journal of Development Studies, 31(2), 289–309.
Lin, H. L., & Lin, E. S. (2010). FDI, trade, and product innovation: Theory and evidence. Southern Economic Journal, 77(2), 434–464.
Molero, J., & Buesa, M. (1996). Patterns of technological change among Spanish innovative firms: the case of the Madrid region. Research Policy, 25(4), 647–663.
Morgan, K. (2007). The learning region: institutions, innovation, and regional renewal. Regional Studies, 41(S1), S147–S159.
Mitra, R. M. (2007). India’s emergence as a global R&D centre. An overview of the Indian R&D system and potential. ITPS Working paper, 12.
Mu, J., Thomas, E., Peng, G., & Di Benedetto, A. (2017). Strategic orientation and new product development performance: The role of networking capability and networking ability. Industrial Marketing Management, 64, 187–201.
Nair, A., Guldiken, O., Fainshmidt, S., & Pezeshkan, A. (2015). Innovation in India: A review of past research and future directions. Asia Pacific Journal of Management, 32(4), 925–958.
Najafi-Tavani, S., Najafi-Tavani, Z., Naudé, P., Oghazi, P., & Zeynaloo, E. (2018). How collaborative innovation networks affect new product performance: Product innovation capability, process innovation capability, and absorptive capacity. Industrial Marketing Management, 73, 193–205.
Parisi, M. L., Schiantarelli, F., & Sembenelli, A. (2006). Productivity, innovation and R&D: Micro evidence for Italy. European Economic Review, 50(8), 2037–2061.
Rajeswari, A. R. (1996). Indian patent statistics—An analysis. Scientometrics, 36(1), 109–130.
Ramadani, V., Hisrich, R. D., Abazi-Alili, H., Dana, L. P., Panthi, L., & Abazi-Bexheti, L. (2019). Product innovation and firm performance in transition economies: A multi-stage estimation approach. Technological Forecasting and Social Change, 140, 271–280.
Reid, S., & Garnsey, E. (1996). Incubator Centres and Success in High Technology Firms: The Work of St. John’s Innovation Centre. ESRC Innovation Programme.
Rodríguez-Pose, A., & Crescenzi, R. (2008). R&D, spillovers, innovation systems and the genesis of regional growth in Europe. Regional Studies, 42(1), 51–67.
Schumpeter, J. A. (2013). Capitalism, socialism, and democracy. Routledge.
Wagner, J. (1995). Exports, firm size, and firm dynamics. Small Business Economics, 7(1), 29–39.
Walz, U. (1997). Innovation, foreign direct investment and growth. Economica, 64(253), 63–79.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Appendix
Appendix
Rights and permissions
About this article
Cite this article
Kaur, P., Punia Nakai, G. & Kaur, N. Spatial Spillover of Product Innovation in the Manufacturing Sector: Evidence from India. J Knowl Econ 13, 447–473 (2022). https://doi.org/10.1007/s13132-021-00721-0
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s13132-021-00721-0