posted on 2023-07-26, 14:05authored byEmanuele Giovannetti, Claudio A. Piga
This paper studies the contrasting effects on innovations and productivity arising from active cooperation in innovation activities among competitors and from passive cooperation induced by these activities’ spillovers. A three-stage productivity function is estimated showing that firms’ innovations are supported by their active cooperation within their local innovation network of suppliers and customers and by passive cooperation through sectors’ spillovers. Contrary to this, active cooperation in innovation activities among competitors reduces their innovation rates and, indirectly, productivity. Hence, innovation policies and strategies aimed at restraining active cooperation among competitors, while encouraging it within a firm's local innovation network, may contribute to the system-wide introduction of process and product innovations and ultimately productivity.
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Highlights
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Active cooperation within a local innovation network supports firms’ innovations.
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Passive cooperation through sectors’ spillovers facilitates firms’ innovations.
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Active cooperation among competitors reduces innovation rates and productivity.
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Innovation policies should aim to restrain active cooperation among competitors.
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Innovation policies need encouraging cooperation within local innovation networks.