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Firm innovation in policy-driven parks and spontaneous clusters: the smaller firm the better?

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Abstract

Mixed evidence has been found regarding how locating in a cluster or a park affects firms’ performance. This paper investigates how locating in different types of clusters and parks interacted by firm size or in-house R&D capability affects a firm’s innovation. Empirically testing the research hypotheses by the data of 165 Taiwan’s manufacturing firms in the information and communication technology sector and taking policy-driven parks (e.g., science parks and industrial parks) and spontaneously clusters as examples, we find that in emerging economies, firms with inferior in-house R&D capability gain more innovation benefits by locating in a science park or a spontaneous cluster while smaller firms gain more innovation benefits by locating in an industry park or a spontaneous cluster. Moreover, our findings also suggest that locating in a science park, smaller firms benefit more than larger firms in terms of innovation performance whereas larger firms benefit more than smaller firms in terms of market performance. The findings suggest that in emerging economies, compared to larger firms, smaller firms are less influenced by negative spillover effect when locating in clusters or parks.

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Notes

  1. This can be interpreted as larger firms gain less in innovation in a cluster than smaller firms.

  2. This hypothesis can be interpreted reversely, i.e., the less the in-house R&D, the less losses in innovation due to negative spillover effect.

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Authors and Affiliations

  1. Department of Business Administration, National Chengchi University, 64, Sec.2, Zhi-Nan Road, Taipei, 116, Taiwan

    Kuo-Feng Huang, Chwo-Ming Joseph Yu & Dah-Hsian Seetoo

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  1. Kuo-Feng Huang
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  2. Chwo-Ming Joseph Yu
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  3. Dah-Hsian Seetoo
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Correspondence to Kuo-Feng Huang.

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Huang, KF., Yu, CM.J. & Seetoo, DH. Firm innovation in policy-driven parks and spontaneous clusters: the smaller firm the better?. J Technol Transf 37, 715–731 (2012). https://doi.org/10.1007/s10961-012-9248-9

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