Does the Location of Consumer Demand Matter for Demand-pulled Innovation? An Empirical Test Based on a Survey of Manufacturing Firms in Korea
0
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
This paper examines the effects of demand-pull on innovation activities at the firm level using the location of firms’ main markets. The use of firm sales or industry sales to measure the demand-pull effect, as done in previous studies, overlooks the qualitative aspect (i.e., sophistication) of demand and fails to empirically separate the demand-pull effect from the firm’s fixed effects (e.g., financial and managerial capability) that induce firms’ innovation. By utilizing information on the geographical location of firms’ main markets, this paper develops a novel method to test the demand-pull effect and analyzes whether the location of a firm’s main market has a different effect on innovation. Using Korean manufacturing data at the firm level, this paper finds the following: (1) firms with a main market only in domestic countries are less likely to engage in innovative activities than those with a main market in foreign countries, (2) firms with a main market in advanced countries are more likely to innovate than those without a main market in advanced countries, and (3) demand-pull effects are strong and robust for product innovation, whereas such effects are weaker or do not exist for process innovation.
Abstract
This paper examines the effects of demand-pull on innovation activities at the firm level using the location of firms’ main markets. The use of firm sales or industry sales to measure the demand-pull effect, as done in previous studies, overlooks the qualitative aspect (i.e., sophistication) of demand and fails to empirically separate the demand-pull effect from the firm’s fixed effects (e.g., financial and managerial capability) that induce firms’ innovation. By utilizing information on the geographical location of firms’ main markets, this paper develops a novel method to test the demand-pull effect and analyzes whether the location of a firm’s main market has a different effect on innovation. Using Korean manufacturing data at the firm level, this paper finds the following: (1) firms with a main market only in domestic countries are less likely to engage in innovative activities than those with a main market in foreign countries, (2) firms with a main market in advanced countries are more likely to innovate than those without a main market in advanced countries, and (3) demand-pull effects are strong and robust for product innovation, whereas such effects are weaker or do not exist for process innovation.
참고문헌 (15)
- Brouwer, E., "Innovative Output, and a Firm’s Propensity to Patent: An Exploration of CIS Micro Data", Journal of Public Economics, 28(6), pp.615~624 (1999)
- Brouwer, E, "Measuring the Unmeasurable: A country's Non-R&D Expenditure on Product and Service innovation", Research Policy, 25(8), pp.1235~1242 (1997)
- Cainelli, G., "Innovation and Economic Performance in Services: A Firm Level Analysis", Cambridge Journal of Economics, 30(3), pp.435~458 (2006)
- Chidamber, S., "A Research Retrospective of Innovation Inception and Success: The Technology-push, Demand-pull Question", International Journal of Technology Management, 9(1), pp.94~112 (1994)
- Geroski, P, "Innovative Activity over the Business-Cycle", Economic Journal, 105(431), pp.421~440 (1995)
- Guerzoni, M., "The Impact of Market Size and Users’ Sophistication on Innovation: The Patterns of Demand", Economics of Innovation and New Technology, Taylor & Francis Journals, 19(1), pp.113~126 (2010)
- Hall, B., J, "Innovation, Industry Evolution and Employment" (1999), Cambridge University Press
- Kleinknecht, A., "Demand and Innovation: Schmookler Re-examined", Research Policy, 19(4), pp.387~394 (1990)
- Mowery, D., "The Influence of Market Demand upon Innovation: A Critical Review of Some Recent Empirical Studies", Research Policy, 8(2), pp.102~153 (1979)
- Ojala, A., "Market Entry Decisions of U.S. Small and Medium-sized Software Firms", Management Decision, 46(2), pp.187~200 (2008)
- Porter, M., "The Competitive Advantage of Nations" (1990), Free Press
- Porter, M., "The Five Competitive Forces That Shape Strategy", Harvard Business Review, 86(1), pp.79~93 (2008)
- Scherer, F. M., "Demand-pull and Technological Invention: Schmookler Revisited", Journal of Industrial Economics, 30(3), pp.225~237 (1982)
- Schmookler, J., "Invention and Economics Growth" (1966), Harvard University Press
- Survey of Technology and Innovation on the Manufacturing Sector in South Korea, , Science and Technology Policy Institute (STEPI), ~ (2005)