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Location, Decentralization, and Knowledge Sources for Innovation

Published on May 1, 2011in Organization Science3.26
· DOI :10.1287/orsc.1100.0526
Aija Leiponen15
Estimated H-index: 15
(Imperial College London),
Constance E. Helfat33
Estimated H-index: 33
(Dartmouth College)
Abstract
When firms seek to innovate, they must decide where to locate their innovation activity. This location choice requires firms to make a simultaneous choice about the organizational structure of innovation activity: almost by definition, multiple locations per firm imply some degree of decentralization. We compare predictions of the knowledge-based view with the predictions of organizational economics regarding the location and decentralization of R&D. Using firm-level data on R&D locations in Finland, we examine the conditions under which firms with multiple R&D locations also have greater innovation output. Our results indicate that multilocation of R&D activity is positively associated with imitative innovation output and is strongly correlated with greater external knowledge sourcing. We also find that the positive association between multiple R&D locations and innovative output does not apply to new-to-the-market innovations. The results are consistent with the interpretation that multilocation of R&D enables firms to access a broad set of external sources of knowledge in pursuit of imitative rather than new-to-the market innovation. Moreover, these findings imply heterogeneity in R&D strategies between firms pursuing new-to-the-market innovation and firms pursuing imitative innovation. It is thus important to distinguish between new-to-the-market and imitative innovations, because their determinants may differ.
  • References (39)
  • Citations (117)
References39
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Cited By117
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#1Christophe Pennetier (Ad: INSEAD)
#2Karan Girotra (Cornell University)H-Index: 1
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#1Xiaoying Li (SYSU: Sun Yat-sen University)
#2Jinling Li (SYSU: Sun Yat-sen University)
Last.Xinjie Wu (SYSU: Sun Yat-sen University)
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#1Li Jian (College of Business Administration)H-Index: 27
#2Yishu Li (College of Business Administration)
Last.Ling Yuan (College of Business Administration)
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#1Elena Cefis (University of Bergamo)H-Index: 17
#2Orietta Marsili (University of Bath)H-Index: 18
Last.Damiana Rigamonti (AU: Aarhus University)H-Index: 1
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