Regions Matter: How Localized Social Capital Affects Innovation and External Knowledge Acquisition

Keld Laursen, Francesca Masciarelli, Andrea Prencipe

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    To introduce new products, firms often use knowledge from other organizations. Drawing on social capital theory and the relational view of the firm, we argue that geographically localized social capital affects a firm's ability to innovate through various external channels. Combining data on social capital at the regional level, with a large-scale data set of the innovative activities of a representative sample of 2,413 Italian manufacturing firms from 21 regions, and controlling for a large set of firm and regional characteristics, we find that being located in a region characterized by a high level of social capital leads to a higher propensity to innovate. We find also that being located in an area characterized by a high degree of localized social capital is complementary to firms' investments in internal research and development (R&D) and that such a location positively moderates the effectiveness of externally acquired R&D on the propensity to innovate.
    To introduce new products, firms often use knowledge from other organizations. Drawing on social capital theory and the relational view of the firm, we argue that geographically localized social capital affects a firm's ability to innovate through various external channels. Combining data on social capital at the regional level, with a large-scale data set of the innovative activities of a representative sample of 2,413 Italian manufacturing firms from 21 regions, and controlling for a large set of firm and regional characteristics, we find that being located in a region characterized by a high level of social capital leads to a higher propensity to innovate. We find also that being located in an area characterized by a high degree of localized social capital is complementary to firms' investments in internal research and development (R&D) and that such a location positively moderates the effectiveness of externally acquired R&D on the propensity to innovate.
    LanguageEnglish
    JournalOrganization Science
    Volume23
    Issue number1
    Pages177-193
    ISSN1047-7039
    DOIs
    StatePublished - 2012

    Keywords

      Cite this

      Laursen, Keld ; Masciarelli, Francesca ; Prencipe, Andrea . / Regions Matter : How Localized Social Capital Affects Innovation and External Knowledge Acquisition. In: Organization Science. 2012 ; Vol. 23, No. 1. pp. 177-193
      @article{947e474418554dc9a50808ce613c8ce6,
      title = "Regions Matter: How Localized Social Capital Affects Innovation and External Knowledge Acquisition",
      abstract = "To introduce new products, firms often use knowledge from other organizations. Drawing on social capital theory and the relational view of the firm, we argue that geographically localized social capital affects a firm's ability to innovate through various external channels. Combining data on social capital at the regional level, with a large-scale data set of the innovative activities of a representative sample of 2,413 Italian manufacturing firms from 21 regions, and controlling for a large set of firm and regional characteristics, we find that being located in a region characterized by a high level of social capital leads to a higher propensity to innovate. We find also that being located in an area characterized by a high degree of localized social capital is complementary to firms' investments in internal research and development (R&D) and that such a location positively moderates the effectiveness of externally acquired R&D on the propensity to innovate.",
      keywords = "Social capital, Social interaction, External R&D acquisition, Internal R&D, Product innovation",
      author = "Keld Laursen and Francesca Masciarelli and Andrea Prencipe",
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      year = "2012",
      doi = "10.1287/orsc.1110.0650",
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      Regions Matter : How Localized Social Capital Affects Innovation and External Knowledge Acquisition. / Laursen, Keld; Masciarelli, Francesca ; Prencipe, Andrea .

      In: Organization Science, Vol. 23, No. 1, 2012, p. 177-193.

      Research output: Contribution to journalJournal articleResearchpeer-review

      TY - JOUR

      T1 - Regions Matter

      T2 - Organization Science

      AU - Laursen,Keld

      AU - Masciarelli,Francesca

      AU - Prencipe,Andrea

      N1 - Published online: May 17, 2011

      PY - 2012

      Y1 - 2012

      N2 - To introduce new products, firms often use knowledge from other organizations. Drawing on social capital theory and the relational view of the firm, we argue that geographically localized social capital affects a firm's ability to innovate through various external channels. Combining data on social capital at the regional level, with a large-scale data set of the innovative activities of a representative sample of 2,413 Italian manufacturing firms from 21 regions, and controlling for a large set of firm and regional characteristics, we find that being located in a region characterized by a high level of social capital leads to a higher propensity to innovate. We find also that being located in an area characterized by a high degree of localized social capital is complementary to firms' investments in internal research and development (R&D) and that such a location positively moderates the effectiveness of externally acquired R&D on the propensity to innovate.

      AB - To introduce new products, firms often use knowledge from other organizations. Drawing on social capital theory and the relational view of the firm, we argue that geographically localized social capital affects a firm's ability to innovate through various external channels. Combining data on social capital at the regional level, with a large-scale data set of the innovative activities of a representative sample of 2,413 Italian manufacturing firms from 21 regions, and controlling for a large set of firm and regional characteristics, we find that being located in a region characterized by a high level of social capital leads to a higher propensity to innovate. We find also that being located in an area characterized by a high degree of localized social capital is complementary to firms' investments in internal research and development (R&D) and that such a location positively moderates the effectiveness of externally acquired R&D on the propensity to innovate.

      KW - Social capital

      KW - Social interaction

      KW - External R&D acquisition

      KW - Internal R&D

      KW - Product innovation

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      DO - 10.1287/orsc.1110.0650

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      JO - Organization Science

      JF - Organization Science

      SN - 1047-7039

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