INFLUENCE OF INSTITUTIONAL AND GEOGRAPHICAL FACTORS ON THE OPENNESS AND DISPERSION OF KNOWLEDGE-SOURCING PRACTICES

Abstract

This dissertation consists of three essays examining the influence of contextual factors on the patterns of knowledge-sourcing of firms. I argue that both the institutional framework and the geographical location exert an influence in the way firms search for innovative knowledge outside of their own boundaries and across geographical distances. The first essay explores the influence of location in a peripheral region on the patterns of collaboration for innovation. The second essay focuses on the effect of specific public policies on the characteristics of innovation practices. The third essay studies the changes in the patterns of innovation after a change of ownership produced by the privatization of formerly state-owned companies. The first essay focuses on the influence of geographical factors (in particular the location in a peripheral economy) on patterns of knowledge sourcing. Using patent data, I examine the dispersion of inventor networks in two countries located in the periphery of Europe. I find that in these settings, the disaggregation of innovation across national borders will depend on a combination of location, multinationality of the firm, knowledge tacitness and organizational capabilities in innovation. In the context of national systems of innovation in peripheral economies, economic actors connected to more innovative locations tend to be part of more geographically dispersed inventor networks. When these economic actors are engaged in tacit knowledge creation, their innovative activities tend to be co-located, unless the orchestrator of the innovation is a highly innovative company that is able to conduct this type of innovation in a dispersed fashion. The second essay explores whether publicly-funded schemes for innovation are related to an increase in the “openness” of firms’ innovation practices. Using survey data from 5,238 firms in 29 countries, I find that both monetary and non-monetary support policies for innovation are related to an increase in the degree of openness of individual firms. This openness is expressed both in terms of the number of external partners with whom they collaborate and the number of open innovation activities they perform. However, the relationship between the extent of public support and openness seems to be negatively moderated by the existence of previous innovative activity within the firm. Public support has more impact on less innovative firms and less influence when the firm is already innovative, which implies that it is important to target such supports in order to maximize their impact. Additionally, I find that non-monetary support is more critical than financial support in increasing openness. For policy makers facing salient financial constraints, this implies that institutions and government policies can play an important role in fostering open innovation. The third essay explores the patterns of knowledge sourcing of firms before and after privatization. Privatization of state-owned enterprises generates the adoption of new management practices and changes in the companies' objectives. While the literature has abundantly explored the consequences of privatization over different aspects of firm performance, its effects on innovation have been scarcely explored. While some studies suggest that privatization produces a subsequent reduction in the amount of R&D investment, little else is known about specific changes in the patterns of innovation of privatized firms. I hypothesize that privatized firms are likely to focus on a narrower set of technologies as a response to increased pressure for profitability and short-term results. I also analyze the competing arguments regarding the privatized firms' willingness to engage in collaborations with other firms and to disperse their innovation activities internationally. I used patent data for a sample of privatized firms from multiple countries to assess the validity of these hypotheses.