Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2010-06-21 Number: 10-060/3 Author-Name: Martijn J. Smit Author-Workplace-Name: VU University Amsterdam Author-Name: Maria A. Abreu Author-Workplace-Name: University of Groningen, University of Cambridge Author-Name: Henri L.F. de Groot Author-Workplace-Name: VU University Title: Micro-Evidence on the Determinants of Innovation in The Netherlands: The Relative Importance of Absorptive Capacity and Agglomeration Externalities Abstract: This discussion paper resulted in a publication in 'Papers in Regional Science'.

This paper employs firm-level data to analyze the relative importance of firm characteristics and agglomeration externalities in explaining variation in innovation rates across firms. More specifically, we combine micro-data and census data to estimate the probability that a firm will introduce a goods, service or process innovation. We consider internal firm-level characteristics as well as externalities, using information on the regional production structure to test for Marshall-Arrow-Romer, Porter and Jacobs effects. Our results show that most firm-specific variables are highly statistically significant, whereas agglomeration variables are only significant for a few specific sectors, and even then only for some types of innovation. Classification-JEL: L20, O30, R11 Keywords: innovation, absorptive capacity, agglomeration externalities, Community Innovation Survey, micro-data, firm behavior File-Url: https://papers.tinbergen.nl/10060.pdf File-Format: application/pdf File-Size: 403788 bytes Handle: RePEc:tin:wpaper:20100060