Innovation in Manufacturing
This paper explores the determinants of three innovation outputs in low technology manufacturing factories by exploring innovation dependent on the factory’s network of relationships, both internal (intra-firm cooperation) and external (inter-factory and inter-firm) using data from, the World Bank’s “Investment Climate Survey” (ICS).
The results support the idea that external networks, mainly interaction with universities, and purchasing of foreign licenses constitute a mechanism for generating innovation outputs in low-technology sectors. Foreign ownership does not appear to be a driver of innovative outputs. On the iput side, the results show importance and robustness of capital goods, adaptation and development within the factory where learning by doing, and new technical personnel.
KeywordsForeign Direct Investment Foreign Firm Domestic Firm External Network Local Firm
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